The AI trade has been slowing down in recent weeks. Even some skeptical pundits point to a potential pullback to hit at some point over the near term.
Indeed, the AI rally was bound to hit the pause button at some point, even as the companies fueling the AI boom continue to put their foot on the gas. The second year of the AI boom could prove more turbulent. However, don’t throw in the towel on AI stocks, even if share prices drop a bit ahead of summer.
Three intriguing AI pioneers may be worth checking out amid their recent past few sessions of turbulence. Though it’s impossible to tell when the bottom of a pullback is in, the following seems more than worth watching.
Microsoft (MSFT)
We have enterprise cloud king Microsoft (NASDAQ:MSFT), the firm with its hefty investment in OpenAI. The company certainly fueled the rise in AI interest for many. Undoubtedly, Microsoft has been quick to attach some form of ChatGPT alongside its software offerings, such as Bing and Windows. This makes it more compelling and capable of handling everyday tasks.
Moving ahead, Microsoft may continue doubling down as other big-tech firms strive to copy its Copilot strategy of injecting generative AI into popular software.
Indeed, almost any software application can be profoundly improved with a lightweight AI co-pilot in the passenger seat. In more ways than one, Microsoft shows us it’s better to fly with a co-pilot.
Therefore, it will be interesting to see where the AI pioneer will lead the tech world next. With a new AI hub in London, led by Mustafa Suleyman, Microsoft could stay ahead of the pack.
Alphabet (GOOG, GOOGL)
Many investors probably thought Alphabet (NASDAQ:GOOG, GOOGL) would be first in the AI race. Following the launch of ChatGPT, Alphabet found itself playing the game of catch-up.
Nearly a year after ChatGPT launched, Google released Gemini. And though it’s been a rather unpolished launch, I don’t expect the firm to be pulling any punches as it irons out the wrinkles in its latest less-than-perfect release.
Recently, Google rolled out Gemini in Android Studio to give programmers a nice productivity boost. The move seems to mirror Microsoft’s GitHub Copilot, a code writer that makes use of OpenAI’s impressive technology. True, AI coders won’t completely replace programmers anytime soon. Yet, one has to imagine that the field is one of the largest and easiest to monetize over the near- to medium-term.
In any case, I think Github Copilot may have met its match as Android Studio integrates with Gemini Pro.
Nvidia (NVDA)
Nvidia (NASDAQ:NVDA) was an AI pioneer when most investors viewed the firm as just a video-gaming hardware maker. After a genuinely stunning two years of shares rising nearly 300%, it’s not too hard to imagine many shareholders looking to time an exit after the latest parabolic surge.
Although there’s a good chance NVDA stock flew too far, too fast, I also would not be shocked if shares continued inching higher from here as Nvidia’s Blackwell line of AI chips hits the markets.
Of course, we can’t expect triple-digit growth numbers to last forever. But what if Nvidia is one of those generational anomalies that goes against everything investors have been taught?
Bubble or not, it’s hard to find an analyst who sees NVDA stock reversing course anytime soon. KeyBanc analyst John Vinh expects Blackwell to be a hit this year, with booming demand that could push NVDA stock toward $1,200 per share, another 37% gain from today’s levels.
On the date of publication, Joey Frenette owned shares of Alphabet (Class C) and Microsoft. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
