How smart is it to trade artificial intelligence stocks?
Artificial intelligence (AI) is becoming more and more a part of our lives…
The U.S. economy is evolving at an unprecedented pace. Companies that fail to innovate disappear, and companies like those in the FANG group step in to replace them.
Unlike the tech stocks from the dot-com bubble, these companies have plenty of room to expand and innovate. Several of them are investing in AI.
AI doesn’t have the best reputation — pop culture often portrays it as the enemy. Let me assure you … In its current form, artificial intelligence can’t take over the world.
But, yeah, these companies can make for smart trades — if you do your research. Here’s what to watch in 2021…
Artificial Intelligence Stocks’ Performance in 2020
Artificial intelligence stocks had a great year in 2020. Leading AI companies like Apple (NASDAQ: APPL), NVIDIA (NASDAQ: NVDA), and Facebook (NASDAQ: FB) all had massive gains in the hot 2020 market.
A lot of companies, big and small, have been integrating software into their businesses. Automation is huge. And intelligent analysis of consumer data helps companies be more efficient.
These productive technologies are made possible by advancements in artificial intelligence.
And as AI technology advances, artificial intelligence products will become less expensive. That means more companies could use the technology.
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What to Expect From Artificial Intelligence Stocks in 2021
I think we’re only seeing the beginning of a massive AI revolution. As AI technology improves, more companies will start using it on a massive scale.
In 2021, it could become an even bigger part of our everyday lives. It’s likely that more companies will adopt AI-powered tools and technology. And that can mean even more growth in this industry. The impressive gains and growth of many tech stocks can reflect that.
I’ll be the first to warn you: AI stocks can be risky. They don’t move slowly like blue-chip stocks.
If we’re talking about artificial intelligence penny stocks, the risks are even higher. But I love to take advantage of penny stock volatility. And with the right risk management strategy, artificial intelligence penny stocks could provide great trading opportunities.
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Top Artificial Intelligence Stocks to Watch in 2021
Artificial intelligence companies aren’t all the same. They tend to work on different versions of AI and target different sectors.
Picking AI stocks can be difficult — few publicly traded companies solely focus on AI. The industry is still in its early stages, but as it cements itself into the economy, more companies will become publicly tradable.
Here are a few artificial intelligence stocks to watch in 2021 … Note that I’m watching these stocks. There’s no guarantee any of them will offer a trading opportunity.
For more tips on how to build and maintain a watchlist, check out this post.
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#1 NVIDIA Corp. (NASDAQ: NVDA)
NVDA is my favorite AI stock for 2021. It’s currently the leading supplier of graphics cards for computer gaming and AI systems. Its chips specialize in the deep-learning category of AI. That’s key to the entire artificial intelligence process.
Other companies have used NVDA chips to analyze large sets of data to train their models. These systems analyze old data to find patterns that can be applied to new data as it enters the system. (Kinda like smart traders do with the markets.)
Overall, NVDA is a well-positioned company. Many of the companies below use NVDA graphics cards.
#2 Salesforce.com Inc. (NYSE: CRM)
CRM is an impressive growth story on its own, but its venture into AI could position the company for steady growth for years to come.
CRM developed its Einstein tools to improve companies’ sales forecasts. Einstein analyzes a company’s historical account data to predict which deals are most likely to close. If a company knows one deal has a better chance of closing than another, it can better allocate its resources.
#3 Microsoft Corp. (NASDAQ: MSFT)
MSFT has dominated the business world since its inception. It was one of the few tech stocks to survive the dot-com crash, and it continues to expand.
In 2017, MSFT acquired Canadian AI company Maluuba. Then in 2018, it acquired two more AI companies. Given MSFT’s domination of the computer market, the company’s entrance into this industry shouldn’t be taken lightly.
#4 Alphabet Inc. (NASDAQ: GOOG)
Like Microsoft, Alphabet (Google’s parent company) started its AI endeavors by acquiring smaller, nonpublic AI companies. And so far, it’s acquired more of these companies than any other tech firm.
Just imagine how AI could improve search engines. And GOOG owns several companies in the automated driving space that could benefit from breakthroughs in artificial intelligence.
#5 Apple Inc. (NASDAQ: AAPL)
AAPL is the largest company in the world by market capitalization. The company’s focus on AI has been primarily for its consumer devices — the goal is to improve the user experience. Most of its new devices have special chips to power the complicated AI engine.
To date, the company has sold over one billion iPhones … That means AAPL has the potential to put AI into the hands of over one billion people. That can have a worldwide impact.
#6 Facebook Inc. (NASDAQ: FB)
FB has faced multiple scandals. Even so, the stock is near all-time highs. The company’s a cash-flow machine, and there are no signs that its ad revenue will slow down.
Adding AI to FB’s algorithm could increase profitability. It could help to better target ads and entice companies to spend more money on advertisements.
#7 Baidu Inc. (NASDAQ: BIDU)
BIDU is called the ‘Google of China.’ The companies have similar business models and help consumers navigate the internet. Like Alphabet, BIDU is heavily investing in AI because of the technology’s ability to improve its search engine.
China has a more competitive search engine market than the U.S., and Baidu believes AI can give its product a competitive advantage.
#8 Cloudera Inc. (NYSE: CLDR)
CLDR is a lower-priced AI stock to watch.
It provides data analytics and management products to countries all over the world. Its signature product, Cloudera Enterprise Data Hub, allows companies to run analytical queries on private cloud data centers. CLDR’s tools use AI to enhance its analytics.
Artificial Intelligence Stocks Under $10 To Watch
It’s good to see what’s going on at the upper end of the market. That’s where the big money is. But that doesn’t mean there aren’t smaller companies looking to leverage AI in their operations.
As artificial intelligence continues to grow and more corporations use it in their daily operations, more companies will flood into the industry. Understanding the big picture can help you be a smarter trader.
These companies are less established than the ones listed above, but they have explosive growth potential — if this industry takes off.
Remember: Always do your own research before making any trades. Make a detailed trading plan and stick to it. Never risk more than you can afford. Always be careful when buying any stock online and remember to cut losses quickly.
#9 eGain Corp. (NASDAQ: EGAN)
EGAN is a U.S.-based software-as-a-service company. It provides cloud software to automate customer engagement using AI-powered analytics and machine learning.
EGAN’s products allow companies to analyze consumer data. The stock had an impressive run in October 2020, but it’s back to trading around $10.
#10 Duos Technologies Group Inc. (NASDAQ: DUOT)
DUOT develops AI technology platforms and applications. Its main application is the automated inspection of rail cars while they’re in motion. The company also offers homeland security applications to secure bridges and tunnels.
Artificial Intelligence Stocks Under $5 To Watch in 2021
OK, enough with the boring large-cap and high-priced AI stocks … Let’s look at some artificial intelligence penny stocks that could have the kind of potential I look for in trading.
#11 Cheetah Mobile Inc. (NYSE: CMCM)
CMCM is in the competitive telecommunication industry that’s dominated by Verizon (NYSE: VZ) and AT&T (NYSE: T).
The Cheetah Keyboard uses AI to personalize the smartphone experience.
#12 LAIX Inc. (NYSE: LAIX)
LAIX is a Chinese AI stock. It offers online educational products and services. Its platform includes an AI teacher that interacts with students as they learn English.
#13 Artificial Intelligence Technology Solutions Inc. (OTCPK: AITX)
AITX is the lowest-priced AI stock to watch and one of my recent favorites. The company offers AI and robotic solutions for the security and monitoring industries.
The company recently announced new deals and work contracts, which drove up the price. I traded this stock multiple times in 2020 and 2021 for total profits of $32,152.55 as of this writing.*
(*Please note: My results are far from typical. Individual results will vary. Most traders lose money. I have the benefit of years of hard work, dedication, and experience. Trading is inherently risky. Do your due diligence and never risk more than you can afford to lose.)
2 Artificial Intelligence Stocks in India to Watch in 2021
I only trade stocks listed on U.S. exchanges. But here are a few artificial intelligence stocks that do business worldwide…
#14 Innodata Inc. (NASDAQ: INOD)
INOD is a tech engineering company that operates worldwide. It offers solutions to data challenges that can come up when companies try to implement AI technology.
The stock has been trending higher since mid-2020.
MARK is a U.S.-based company that does business worldwide. It develops AI-based tech products and solutions for businesses.
This AI stock’s a former multiday runner. That’s something I always look for in the penny stocks I like to trade.
Top 2 Artificial Intelligence Stocks in Canada to Watch in 2021
#16 Kinaxis Inc. (OTCPK: KXSCF)
KXSCF is a Canadian company that uses AI to help supply chain businesses plan for the future, monitor risk, and make decisions.
The stock trades on the OTC markets and has very little volume.
#17 BlackBerry Ltd. (NYSE: BB)
BB is a Canadian AI stock. The company uses AI for cybersecurity solutions.
Why Should You Trade AI Stocks?
As a trader, you should always be prepared to take advantage of opportunities. As AI technology advances and new uses for AI are discovered, there could be plenty of trading opportunities in artificial intelligence penny stocks.
We’re already seeing a lot of it in self-driving cars. Who knows what future invention will change our lives?
But AI stocks are like any other sector. They can be hot or cold. And news can come and go.
Learn to take advantage of the hype, news, and volume in AI stocks. Build a watchlist first, then pay attention to the news and watch for your pattern or strategy.
Frequently Asked Questions About Artificial Intelligence Stocks
What Are Artificial Intelligence Stocks?
Artificial intelligence stocks are stocks of companies involved in the development of computer programs that perform tasks that would usually require human intelligence — think voice recognition, self-driving cars, etc.
What Is the Best Stock for Artificial Intelligence?
The best artificial intelligence stocks for trading are the ones that fit your style and strategy. If you like to invest in AI stocks, you might prefer large-cap stocks. If you want to trade artificial intelligence penny stocks, keep a watchlist to see what’s moving. Do your research! And if you need a trading mentor, apply for my Trading Challenge.
What Are the Best Artificial Intelligence Stocks for Self-Driving Cars?
All the major auto manufacturers are racing to develop artificial intelligence for self-driving cars. But they’ll likely partner with companies like Aptiv (NYSE: APTV) and Intel (NASDAQ: INTC), which are already developing automotive smart chips and sensors.
Are AI Stocks Good To Trade?
That depends on the stock, your strategy, and the news. AI technology is still in its infancy. Still, there’s a lot of potential in this sector. AI stocks are worth following and monitoring on your watchlist for potential trades.
How Do I Invest in Artificial Intelligence?
I don’t invest in stocks — I trade them. And trading AI stocks works the same as it does in other sectors: filtering down stocks, creating a watchlist, and having a trading plan ready for if and when they meet your personal trading criteria.
Conclusion: Will You Watch Artificial Intelligence Stocks in 2021?
The AI revolution is off to a great start … But the technology’s just beginning to take off.
The unlimited potential of AI could have a huge impact on how we live in the future. And 2021 could be a big year for this sector.
Do you know how to prepare for a possible artificial intelligence penny stock run?
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What do YOU think of these AI stocks to watch in 2021? Leave a comment and let me know!