With the recent growth in Artificial Intelligence (AI), many investors are starting to think about how they can gain exposure and benefit from the growth of AI. There is no doubt AI is here to stay and will only grow in prominence with time.

The lead player in the AI space is Nvidia, a company that has become synonymous with AI thanks to its innovative graphics processing units (GPUs) and deep learning technologies. NVIDIA’s GPUs are at the forefront of AI applications, powering everything from data centres and autonomous vehicles to gaming and professional visualisation.

Nvidia’s share price has skyrocketed over the last five years, up to the tune of 3,000 per cent. Nvidia has a market cap of $2.70 trillion US dollars. This makes Nvidia the third biggest US listed company behind Microsoft ($3.09 trillion) and Apple ($2.95 trillion).

For context of how big these figures are, the total size of the Australian share market is around $1.6 trillion in US dollar terms.

A question many investors may be pondering – Is Nvidia’s share price expensive? Arguably yes, but an assessment of its growth prospects and how to perceive its valuation relative to its earnings potential is necessary.

Nvidia has its direct competitors, including the likes of AMD (Advanced Micro Devices), Intel Corporation, Qualcomm and IBM.

An alternative way to gain exposure to the growth in AI is via companies that may not be directly AI companies but have significant exposure to the space, such as:

Microsoft Corporation (MSFT): Microsoft offers AI-powered services through its Azure cloud computing platform, including Azure AI and machine learning tools.

Amazon.com Inc. (AMZN): Amazon utilises AI in various aspects of its business, such as product recommendations, supply chain optimisation, and its Amazon Web Services (AWS) cloud platform. AWS offers AI services like Amazon SageMaker for machine learning development.

Google (Alphabet Inc.) (GOOGL): Google is a leader in AI research and development, with products like Google Search, Google Assistant, and Google Cloud AI services. Its parent company, Alphabet, benefits from AI-driven innovations across its various subsidiaries, including Waymo (autonomous vehicles) and DeepMind (AI research).

Salesforce (CRM): Salesforce integrates AI into its customer relationship management (CRM) software through features like Salesforce Einstein, which provides AI-driven insights and automation for sales, marketing, and service tasks.

Taiwan Semiconductor Manufacturing Company Limited (TSMC) is one of the world’s largest semiconductor foundries and plays a crucial role in the AI ecosystem. While TSMC doesn’t directly provide AI products or services, it manufactures semiconductor chips, including those used in AI-related applications.

If you are considering investing in this space, as you can see from this blog, there are many different options. It is important to discuss this with your Financial Adviser and consider what role this exposure could play in your overall portfolio’s asset allocation.

 Any financial product advice provided in this blog is general in nature.  It does not take into account your needs, financial situation or objectives.  Before acting on the advice, you should consider whether it is appropriate to you in light of your needs, financial situation and objectives.