Investing in Artificial Intelligence (AI) – Which Companies to Choose? [Guide]

Artificial intelligence (Ang. Artificial Intelligence, AI) is one of the most important and fastest growing fields of technology in the 21st century. AI applications include both aspects of everyday life and advanced industrial technologies, and its development and implementation have the potential to completely change the way economies, businesses and even entire societies function. Investments in the AI ​​sector attract the attention of investors from around the world, who see the possibility of generating above-average profits in this field. In this article, we will discuss what artificial intelligence is, its applications, benefits and risks associated with investing in this sector, and we will also present promising companies from this sector on the American market.

What is Artificial Intelligence (AI)?

Artificial intelligence, or AI,  is a technology that allows machines to perform tasks that require human intelligence, such as recognizing images, analyzing data, having conversations, counting, writing, generating images or sounds, and many others. AI can already analyze huge amounts of data, learn from it, and make decisions at a level that equals or exceeds human levels in certain areas.

Artificial intelligence is currently used in the following areas, among others:

• Data Analysis and Big Data: AI enables rapid processing and interpretation of huge data sets that are too large for humans to effectively analyze manually. Using machine learning algorithms, AI can recognize patterns, draw conclusions, and predict future trends based on past data. The use of AI in big data is extremely useful in many industries, such as finance, marketing, health, and logistics, where fast analysis and precise forecasts are needed. As a result, organizations can make more accurate business decisions, adapting their strategies to the dynamically changing market.
• Image and video recognition: Used in medical diagnostics, facial recognition, and industrial analytics, image recognition is one of the most advanced applications of AI. It enables rapid pattern detection and detailed analysis, which supports diagnostic decisions in medicine and process automation in industry. With AI, these systems can also monitor anomalies and potential threats, which is used in security monitoring and quality control systems.
• Process automation: AI systems can replace humans in repetitive tasks, such as customer service or technical support, saving companies money. It also allows companies to increase operational efficiency by eliminating human error and speeding up the completion of routine tasks.
• Risk management and protection against cyberattacks: AI detects irregularities and threats in real time, which allows for more effective protection of data and IT systems. Automatic protection systems based on AI are constantly trained on new data, which allows them to adapt to changing cyberattack techniques and provide increasingly advanced protection against threats.
• Autonomous cars: AI technologies are the foundation for the development of autonomous vehicles, which is a revolution for the transport industry. Autonomous cars use artificial intelligence to analyze the environment in real time, recognize obstacles and make decisions, which increases road safety and reduces the risk of accidents.
• Autonomous military equipment:  For example, drones, which, thanks to AI, can make decisions about flight paths, object identification and their potential threat, on their own. Artificial intelligence systems analyze huge amounts of data from sensors and cameras, which allows for immediate reaction and decision-making in combat situations, often faster than a human would be able to do.
• Language models: A language model is an advanced AI system designed to understand, generate, and process natural language. It works by analyzing large volumes of text, learning patterns, meanings, and relationships between words, allowing it to produce coherent and understandable statements. It is used in various applications, such as language translation, chatbots, text generation, and sentiment analysis.

Why is it worth investing in artificial intelligence?

Investing in artificial intelligence has become an attractive prospect for stock market investors because the AI ​​sector is relatively new, and at the same time, this technology has the potential to revolutionize both the economy and the wider world (and is already doing so) in a way similar to how it was revolutionized by the development of the internet. This combination means that companies involved in AI development can potentially have the potential to generate high rates of return.

From a stock market investor’s perspective, AI offers:

• High sector growth: The AI ​​market is growing dynamically and is expected to expand further in the coming years, which may lead to high profits for companies operating in this sector.
• Transformational potential: Investing in AI is investing in the future of technology that can revolutionize various sectors – from finance, through industry, to medicine, military, cybersecurity and media.
• Potential long-term uptrend: Despite the risk and volatility, AI is enjoying growing interest, and the development of this technology is also viewed in the long term. In the context of stock market investments, however, it is worth remembering the phenomenon of the investment cycle, which by definition is an oscillation around this trend, and this can mean periodic declines in the market.

Risks of Investing in Artificial Intelligence (AI) on the Stock Market

Despite the enormous opportunities that investing in artificial intelligence brings, it also involves various types of risks.

Here are some of them:

• Unpredictability of technological development: The rapid pace of AI development can lead to unpredictable changes that may impact the value of investments.
• High competition: The AI ​​market is competitive, and new technologies and innovations can quickly replace existing solutions, which increases the risk for investors.
• Stock price volatility: The AI ​​industry is prone to high stock market volatility because it is dependent on technological innovation and, as a result, highly susceptible to speculation. For example, any delays in technology development or failure to meet high expectations can lead to sharp declines in stock prices, which can pose a risk for short-term investors.

Areas of development of artificial intelligence (AI)

The development of artificial intelligence is based on several key technological pillars that provide the foundation for AI’s effectiveness and potential:

1. Data storage: This is a key part of AI infrastructure, defining how much data can be stored and processed. The ability to store huge amounts of information is essential because AI models need huge datasets for training/learning and optimization. The growing demand for storage, especially in the cloud, makes investing in storage technologies more attractive.
2. Computing power: Computing power refers to the ability of systems to process data per unit of time. High computing power allows for faster and more advanced calculations, which shortens the time needed to train models and analyze data in real time. Companies that produce processors and accelerators, such as GPUs and TPUs, are key players in this space and are often a significant point of interest for investors.
3. Data sources: Data quality, variety, and availability are essential to AI’s performance. Data sources include the places where data is collected on a variety of topics, from financial and medical data to social media and satellite imagery. Companies that specialize in collecting, analyzing, and selling data have a significant impact on AI development and represent interesting investment opportunities.
4. See: The network, or communication infrastructure, enables the flow of information between individual models and areas of AI technology. Thanks to advanced networks, including 5G networks, data can be processed and transmitted in real time, which is crucial for applications such as autonomous vehicles or IoT (Internet of Things). Internet of Things, Internet of Things). Investments in companies developing network technologies are therefore crucial to increasing the effectiveness of artificial intelligence.
5. Algorithms: Algorithms are at the heart of AI because they determine how data is processed. The development of advanced algorithms allows machines to better recognize patterns, make decisions, and perform complex tasks. Companies that develop new algorithms and AI technologies play a key role in the development of AI.

AI investment can therefore take place on various levels. It is possible to invest not only directly in AI software companies, but also in companies in the area of ​​data storage, high-performance equipment production, network development or even energy (huge amounts of electricity are needed to power computing power farms). Each of these sectors plays an important role in the development and implementation of AI, which is why AI investments are multidimensional and can cover a wide range of industries and technologies.

American AI companies

American companies dominate the AI ​​sector, mainly due to heavy investment in research and development of this technology and the large availability of capital in the market. The United States also has the world's largest stock market, and these two factors mean that investors seeking exposure to AI often choose American companies that are leaders in this industry.

Below is a subjectively selected list of US companies that provide exposure to the growth of the artificial intelligence sector:

Large companies:

1. Nvidia – Manufacturer of graphics chips that are key to advanced AI computations, especially in the areas of machine learning and artificial vision.
2. Microsoft - It has an extensive Azure AI platform, offering cloud solutions supporting the development and implementation of artificial intelligence in enterprises. One of the main investors in OpenAI, creators of ChataGPT.
3. A - Google's parent company, known for its work on AI development, particularly in the context of natural language processing and autonomous technologies.
4. Meta - Focuses on AI supporting social media and the development of virtual reality and the metaverse.
5. Amazon - Offers a range of AI solutions on the AWS platform to build, train, and deploy machine learning models and enable the creation of generative AI applications.
6. Apple – It uses AI to develop features such as facial recognition, Siri and health analysis, and also invests in dedicated AI chips (Neural Engine) that optimize task processing directly on devices.

Medium-sized companies:

1. OMG - A company that produces high-performance processor chips that are widely used in AI applications.
2. Intel - A processor manufacturer that develops technologies supporting AI solutions at the hardware level. Currently in the process of restructuring.
3. Broadcom – It specializes in the production of semiconductors, which form the basis for AI infrastructure.
4. Palantir Technologies – It offers analytical solutions for large data sets, which are key to advanced analysis and visualization.
5. Qualcomm – Manufacturer of chipsets for mobile devices, supporting the development of AI applications in the IoT and smartphone segments.

Small companies:

1. Crowdstrike – A company offering advanced cyberattack protection technologies that use AI to detect threats.
2. Snowflake- A company specializing in cloud data analysis solutions that support the operation of AI systems.
3. Synopsis – Producer of EDA (Electronic Design Automation) tools that support the design of integrated circuits used in AI.
4. Super Micro Computer – specializes in the design and production of high-performance servers and storage solutions.

Where to invest in stocks

Below is a list of offers from selected brokers offering both shares and CFD per share from all over the world.

For example on XTB Today, we find over 4000 equity instruments and 1400 ETFs, incl Saxo Bank over 19 companies and 000 ETF funds, incl Exante as many as 50 shares and 000 ETFs.

Broker
Country	Poland	Denmark	Cyprus
Number of exchanges on offer	16 exchanges	37 exchanges	50 exchanges
Number of shares in the offer	approx. 4000 - shares circa 2200 - CFDs on shares	19 - shares 8 - CFDs on shares	50 - shares
The amount of ETF on offer	approx. 1400 - ETF approx. 200 - CFD on ETF	3000 - ETF 675 - CFD on ETF	10 - ETF
Commission	0% commission up to EUR 100 turnover / month	according to the price list	according to the price list
Min. Deposit	0 PLN (recommended min. PLN 2000 or USD 500, EUR)	0 PLN / 0 EUR / 0 USD	10 000 EUR
Tool	xStation	SaxoTrader Pro Saxo Trader Go	Exante platform
	REVIEW	REVIEW	REVIEW
	CREATE AN ACCOUNT	CREATE AN ACCOUNT	CREATE AN ACCOUNT

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. From 72% to 89% of retail investor accounts record monetary losses as a result of trading CFDs. Think about whether you understand how CFDs work and whether you can afford the high risk of losing your money.

Summary

Investing in artificial intelligence offers a wide range of growth and profit opportunities, but it also requires caution and understanding of the risks. The AI ​​sector, although future-proof, is changing very dynamically, which is why investment decisions should be well thought out. Choosing the right companies that have not only promising technologies, but also solid foundations and development prospects, plays a key role here. However, it should be remembered that solid foundations are just one of many factors that are worth considering in the decision-making process when choosing companies for investment in the AI ​​sector. Stock market investments, and markets in general, have their own rules, and the prices of shares of companies, including technology companies, can sometimes be detached from business reality - both in a good and bad way.