The Smartest Artificial Intelligence (AI) Stocks to Buy With $1,000 Right Now

AI Industry Overview - Artificial intelligence (AI) investing is a leading trend in the market, with companies investing billions to build computing capacity for an AI-first economy [1] - The AI hardware sector is dominated by Nvidia, which holds a 90% market share in graphics processing units (GPUs) used for AI applications [4] Nvidia - Nvidia is reapplying for an export license to ship GPUs to China, which is expected to boost its growth rate, projecting a 50% year-over-year revenue increase for Q2, although it could have been 77% without the export restrictions [5][6] - The company is positioned for sustained growth in the AI sector, indicating a strong future for its stock [6] Taiwan Semiconductor Manufacturing (TSMC) - TSMC is a critical supplier for Nvidia, providing chips for its GPUs, and is recognized for its cutting-edge technology and high chip yields, which enhance profitability [8] - TSMC anticipates a 45% compounded annual growth rate (CAGR) in AI-related revenue over the next five years, highlighting significant future growth potential [9] Cloud Computing Sector - The cloud computing industry is benefiting from AI deployment, with companies preferring to rent computing power from providers like Amazon and Alphabet rather than building their own data centers [10] - The global cloud computing market is projected to grow from approximately $750 billion in 2024 to $2.4 trillion by 2030, driven by both AI and non-AI workloads [11] Amazon Web Services (AWS) - AWS is a major profit driver for Amazon, contributing 63% of operating profits despite only accounting for 19% of total revenue, indicating its importance to the company's financial health [12] - AWS is expected to continue driving Amazon's stock higher due to its market-leading growth [12] Google Cloud - Google Cloud is growing faster than AWS, with a 28% growth rate compared to AWS's 17%, and is working towards improving its operating margin from 18% [13] - As the cloud computing market expands, both Amazon and Alphabet are well-positioned to capitalize on the rise of AI, making their stocks attractive investments [13]