As investors look ahead to the end of the first quarter of 2024, artificial intelligence (AI) remains a key trend to watch. AI has meant a huge boom in business for companies well-positioned to capitalize on the hype. In late February, chipmaker Nvidia Corp. (NVDA) broke market records by adding $272 billion in market value in a single day on the strength of its AI business. However, the gains have not been divided equally across the industry. The Nasdaq CTA Artificial Intelligence & Robotics Index, a benchmark for the AI industry as a whole, is up about 9% in the last year, well shy of the 26% improvement of the Russell 1000 Index over the same period.

Below, we explore the best AI stocks for March 2024, considering those with the best value, fastest growth, and most momentum. Data are current as of Feb. 22, 2024.

Best Value AI Stocks

Value investing is a strategy based on the principle that some stocks trade at prices that are below their intrinsic value. Investors able to identify these stocks, usually through analysis of fundamental metrics, may be primed for a return on their investment when the market corrects the mispricing and the stocks rise. One such metric is the price-to-earnings (P/E) ratio. Lower P/E ratios are generally considered to be signs of a more attractively valued company since it is valued at less than its fundamental value.

Best Value AI Stocks
	Price ($)	Market Cap ($B)	12-Month Trailing P/E Ratio
HP Inc. (HPQ)	29.06	28.8	8.8
Gen Digital Inc. (GEN)	21.88	13.9	10.1
Cognizant Technology Solutions Corp. (CTSH)	79.58	39.6	18.9

• HP Inc.: This is an IT company developing personal computers, printers, and related hardware and technology. HP has integrated AI tools into many of its desktop and laptop computers to improve audio, video, responsiveness, use of resources, and other measures of performance.
• Gen Digital Inc.: Gen Digital is a cybersecurity company operating global brands including Norton, Avast, and LifeLock, among others. With the help of AI technology, Avast blocked 10 billion cyberattacks in 2023, representing nearly 50% more incidents than took place in 2022.
• Cognizant Technology Solutions Corp.: Cognizant is a professional services company that aids clients in integrating technology into business practices. The company operates through financial services, health sciences, communications, media, and technology divisions.

Fastest-Growing AI Stocks

Investors often evaluate growth stocks based on revenue and earnings per share (EPS), as these are key measures of a company's performance. Looking at only one of these two factors, however, can leave your search susceptible to temporary phenomena, including tax law changes or one-off gains.

We aim for a more balanced screen of AI growth stocks by looking at the most recent year-over-year percentage growth for both revenue and EPS, giving each equal weighting. We also exclude companies with growth rates in either category of 1,000% or more on the grounds that these are likely outliers.

Fastest-Growing AI Stocks
	Price ($)	Market Cap ($B)	EPS Growth (%)	Revenue Growth (%)
Verisk Analytics Inc. (VRSK)	239.77	34.8	207.5	7.4
ServiceNow Inc. (NOW)	772.42	158.3	92.9	25.6
Intuitive Surgical Inc. (ISRG)	389.60	137.3	86.0	16.5

• Verisk Analytics Inc.: This firm specializes in strategic data analytics and technology for the global insurance industry. The company completed a $250-million share buyback program in the final months of 2023.
• ServiceNow Inc.: This company is a provider of enterprise cloud computing solutions. ServiceNow is best known for its cloud-based Now Platform. The company recently announced a five-year alliance with Visa (V) to transform payment services.
• Intuitive Surgical Inc.: Intuitive is a medical device company that develops and manufactures a variety of robotic products for use in minimally invasive surgery procedures.

AI Stocks With the Most Momentum

Momentum investing is based on the principle that stocks that have increased at a faster rate compared with the market or their peers are likely to continue on that trajectory, at least in the short term, as long as there aren't fundamental changes to those companies' operations or the broader industry.

Below, we look at the AI stocks that have provided the highest total return in the last 12 months.

AI Stocks With the Most Momentum
	Price ($)	Market Cap ($B)	12-Month Trailing Total Return (%)
Nvidia Corp. (NVDA)	780.94	1,929	277.1
Meta Platforms Inc. (META)	488.35	1,245	185.5
Advanced Micro Devices Inc. (AMD)	182.29	294.5	137.0

• Nvidia Corp.: A chip manufacturer that provides computer graphics processors, chipsets, and related software, Nvidia was the best-performing stock in the S&P 500 for 2023, more than tripling in value during the year.
• Meta Platforms Inc.: Formerly known as Facebook, the company operates social media and entertainment platforms including Facebook, Instagram, WhatsApp, and Messenger.
• Advanced Micro Devices Inc.: A maker of semiconductors, Advanced Micro Devices is known as AMD. It provides chips for computing, graphics, enterprise, embedded, and semi-custom applications. In early February, the company announced the launch of Embedded+, a new architectural solution for many of its processors.
  

Advantages of AI Stocks

Broad applications: AI has transformed—or has the potential to transform—a host of different industries and sectors. Companies positioned as leaders within the AI space could be well-positioned to benefit from widespread adoption and a broad, diverse customer base.

Fast-moving innovation: AI is at the forefront of innovation today, with both major tech firms and smaller up-and-coming companies working diligently to advance this technology. This means that the potential for breakthrough success may be huge as the industry continues to evolve.

Popularity: As of early 2024, AI is one of the most talked-about trends in technology. Interest in this space is very high, meaning that investors could be poised to benefit from tremendous momentum with the right investments.

Disadvantages of AI Stocks

Industry uncertainty: Although AI has been in existence for decades, it is only in the last several years that technological developments have brought this field into the mainstream. With changes and advancements happening incredibly quickly, it can be difficult for even the most knowledgeable investors to keep pace with what is happening in the industry. For instance, this means it could be easy for investors to get caught up in the hype surrounding a particular company after the ideal time to purchase that company's stock.

Untested companies: While many of the major tech firms are involved in AI, other AI companies have little history and foundation for investors to consider when selecting investments. These companies may pose a greater risk than more stable, time-tested firms.

Dangers of AI: Leaders in computer science and related fields have warned of the potential dangers associated with AI. As the field continues to expand and change, public opinion, regulations, and other factors may change and have the potential to impact AI stocks in unexpected ways.

The Bottom Line

AI stocks present investors with the opportunity to tap into one of the most popular—and potentially most revolutionary—technology trends today. With companies across virtually all industries and sectors exploring ways to integrate AI into their operations, firms that are focused on the hardware and software required to run AI programs stand to benefit. But there are significant risks to investing in AI stocks, including the uncertain future of the industry and the potential dangers of AI technology itself.

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As of the date this article was written, the author does not own any of the above securities.