How to invest in artificial intelligence in 2024?

 

Investing in artificial intelligence continues to have a highly speculative component. AI-based crypto projects are a clear example of widespread greed in the incipient bull run of 2024. Retail interest in Nvidia shares and other artificial intelligence companies on the stock market could even be explained by simple FOMO.

It is no less true that there are disruptive projects that are opening a door to utility. The most obvious example is found in the solutions of giants like OpenAI, which are called to completely transform society. Short-term greed or medium and long-term investment? Both positions may be effective in 2024.

AI Stocks

To invest in companies specialized in artificial intelligence you have to search in depth. We found C3.ai and BigBear.ai, providers of software and solutions with AI, although the performance of their shares in the last five years has been dismal. In contrast, companies focused on industrial automation like Keyence are showing solid growth.

Beyond this handful of companies, it is practically impossible to find shares of companies dedicated exclusively to AI-based solutions. Not even OpenAI is among the publicly traded AI companies, mainly because they are private.

It is relatively easier to invest in Nvidia, Tesla, Microsoft or Alphabet stocks. These technological giants dedicate part of their resources to the development of products related to AI. The ideal is to operate through an online broker that, in addition to allowing the purchase of shares, offers instruments such as indices, funds and CFDs.

AI Cryptocurrencies

More than a hundred AI-based projects populate the crypto space. Bittensor has positioned itself in the first quarter of 2024 as the undisputed leader. With nearly 4.7 billion dollars in capitalization, it has managed to sneak into the top thirty cryptocurrencies in the entire market. These tokens are a good option to invest in artificial intelligence without leaving the crypto market.

AI Funds

Echiquier Artificial Intelligence, DWS Artificial Intelligence and Allianz Global Artificial Intelligence are three of the funds with the best performance in 2023 and 2024. In the case of Echiquier, we are talking about a return of more than 50% in the last year. This is a fund that includes companies that invest in AI, such as Amazon and Nvidia.

AI ETFs

L&G AI (AIAI), Amundi MSCI Robotics & AI ESG Screened (GOAI) and Xtrackers AI & Big Data (XAIX) are among the most popular AI ETFs in 2024. We are talking about funds with a considerable size, exceeding 2 billion euros in the case of XAIX. This ETF also stands out for offering one of the juiciest returns over one and three years: 55% and 11%, respectively.

Advantages and disadvantages of investing in artificial intelligence

Pros

The AI sector has high long-term growth potential.

By investing in useful projects, we support the development of technologies that can positively transform society.

Cons

Investing in purely speculative projects can increase the risk of generating significant losses.

There is a tendency to believe that the growth of AI is unlimited.

There is the possibility of favoring negative disruptions by financially supporting projects without ethical codes.

Investing in artificial intelligence: speculation or utility?

Disruptive technologies often give life to speculation spaces that attract investors and traders interested exclusively in generating profits. The crypto market has been immersed in purely speculative cycles for years, leaving projects with a long-term useful component behind.

AI does not escape this phenomenon. We have already seen how some AI-based cryptocurrencies have skyrocketed and then fallen for no apparent reason. The departure of the crypto winter and the impact of technology companies like Nvidia have revived interest in projects with no apparent usefulness that have quintupled their value in just one week.

Beyond the occasional behavior of tokens such as FAKEAI, ARKI or RAIN (whose prices show three-digit percentage revaluations), investing in artificial intelligence companies on the stock market represents a plausible bet on the development of technologies with high long-term growth potential. . As long as the successful projects solve real problems and do not destroy humanity.