This week, most investors and consumers are focusing on Open AI ChatGPT. The new innovation of private artificial intelligence () startup is taking the world by storm. Essentially, ChatGPT can perform a variety of tasks; he has the ability to write entire essays, conduct detailed research, solve math problems, and answer questions on a variety of topics.
ChatGPT’s scope of information is limited to what can be found on the Internet. But even so, it is clear that we are dealing with an invention with enormous power. This raises a question for investors: what are the best stocks to buy to benefit from an upcoming AI revolution? Given the wide range of AI companies, answering this question requires in-depth analysis.
Companies across the tech landscape are ramping up their efforts on artificial intelligence. Advancements in technology are helping us achieve key milestones in areas such as autonomous driving () and cybersecurity. But recent advances in OpenAI’s chatbots are likely to further force companies around the world to focus on developing similar products. The technology behind ChatGPT has the power to revolutionize the way we teach children, fix computer code and more. InvestorPlace Luke Lango notes:
“In the simplest possible terms, ChatGPT relies on very complex AI algorithms to read, analyze, learn and understand text. By doing this enough times with enough texts, it will eventually learn everything. It is likely to become that all-knowing pattern that can communicate with you like a human.
So which AI stocks will be the winners in the next phase of this new industrial revolution? Let’s take a closer look at the companies that are already advancing chatbots.
EPAM systems (EPAM)
EPAM systems (NYSE:EPAM) recognized the power of AI chatbots as a health and business tool years before some of its peers. In 2020, the digital platform designer and engineering firm highlighted how companies can leverage conversational AI to help improve customer service. The following year, the Vice-President and Senior Manager of EPAM published an article on the benefits of chatbot therapy. A team of researchers from the company was then recognized in March 2022 for their work with an early cancer detection chatbot.
As Luke Lango noted in a recent podcast, AI adoption could explode in 2023 and beyond. If true, EPAM’s stock could also lead the charge. The company has a proven ability to continuously innovate and knows what chatbots are capable of. By focusing on this new technology, EPAM will likely increase its efforts as the industry grows.
Right now, EPAM stock is also down for the year, making it a good time for investors to pounce. As InvestorPlace Will Ashworth reports that the company is growing and recently reported strong third quarter revenue growth. This makes it a clear choice among stocks to buy for the next AI boom.
It’s no surprise that one of Silicon Valley’s stalwarts is ahead of the chatbot market. Although the company is not known for its automated features, Microsoft (NASDAQ:MSFT) has received praise for its work with bots. In fact, the AI customer service platform Netomi ranks its bot framework as the best open source AI chatbot of 2022:
“The Bot Framework Composer is an open source visual authoring framework for developers and cross-functional teams to design and build conversational experiences with Language Understanding, QnA Maker, and bot responses. The Microsoft Bot Framework allows users to use a comprehensive SDK and open source tools to easily connect a bot to popular channels and devices.
Microsoft offers Azure Bot Service, which allows users to create their own bots in sophisticated virtual assistants. Its open-source tools allow users to connect each bot to various devices and channels.
Like EPAM, shares of MSFT are also down for the year. This represents a rare opportunity for such an armored stock that has otherwise always been able to withstand hostile market conditions.
IBM (NYSE:IBM) shocked the world decades ago with one of the first personal computers. While the company may not be the first today to perfect a chatbot, it is certainly making progress in this area.
Similar to Microsoft, IBM describes its own bot, the Watson Assistant, as “a natural language AI chatbot that understands human conversation and enhances the customer experience.” Highly focused on improving the customer experience for businesses, IBM designed its bot to use both entity recognition and intent classification to “better understand customers in context.” The company claims that the bot is adaptable and can understand any request.
IBM and Microsoft will likely find themselves in competition as the race for AI chatbots heats up. Additionally, while IBM cannot be considered a downed tech stock, investors should view it as a stable investment. In 2022, IBM shares managed to rise 8% year-to-date (YTD). Going forward, IBM’s chatbot work should also give it a key competitive advantage, making it one of the best AI stocks to buy.
At the date of publication, Samuel O’Brient held (neither directly nor indirectly) any position in the securities mentioned in this article. The opinions expressed in this article are those of the author, subject to InvestorPlace.com publishing guidelines.