3 Stocks to Buy if We Are in An Artificial Intelligence (AI) Stock Market Bubble

Group 1 - The market is increasingly concerned about a potential AI bubble that could negatively impact a significant portion of the stock market, particularly affecting companies like Nvidia that are heavily invested in AI [1] - Concerns have intensified following OpenAI's announcement of multiple deals with computing providers, which are structured to involve chip suppliers investing in OpenAI's high valuation due to its lack of cash to pay for chips [2] - Historical parallels are drawn to the dot-com bubble, but it is noted that other companies besides OpenAI are making substantial investments in AI chips, indicating a broader market involvement [3] Group 2 - Companies such as Amazon, Alphabet, and Meta Platforms have non-AI businesses generating cash flow, which can sustain them even if the AI bubble bursts, making them attractive investment options [4] - Amazon Web Services (AWS) is a significant profit driver for Amazon, contributing 53% of operating profits in the second quarter, but it also represents a large capital expense due to the demand for AI computing power [6] - If the AI bubble bursts, Amazon is expected to maintain its client base for AWS while reducing the need for extensive computing capacity, which would improve its cash flow and make the stock appear increasingly undervalued [7][8] Group 3 - Amazon's consumer-facing business is projected to continue growing at a solid rate, even if the AI sector faces challenges, allowing it to potentially outperform the market [8] - Alphabet's revenue is primarily derived from its Google Search engine, which remains strong, while Meta Platforms relies heavily on advertising revenue from its social media platforms, both of which are less vulnerable to an AI bubble collapse [9]