Photo by Steve Johnson on Unsplash

An Introduction

All but one of the 7 artificial intelligence stock categories that I analyze weekly (see below) increased in value this week but two categories  are still down MTD suggesting that the surge in this sector is stalling. 

7 AI Categories Compared

Below is how each category performed last week in comparison to each other, to help you make prudent investment decisions going forward. The categories are presented with data:

• for this week, in descending order,
• and MTD to provide a short-term trend in each category
• along with a description of what makes up each category,
• the stocks included in each category
• and commentary on those stocks that made significant moves last week, where available.

1. Custom Design AI Chip Stocks: up 7.6% this week; up 4.4% MTD
   • Description: The stock prices of electronic design automation (EDA) software companies creating custom designed chips is set to take off given a projected 11% CAGR in the category between now and 2028. This portfolio tracks the stock price changes of 3 companies in this category.
   •  3 Constituents: CDNS (+8.1%); SNPS which is acquiring ANSS (+8.0%) and ANSS (+6.5%)
   • Articles:
     • Cadence and Nvidia Unveil Groundbreaking Generative AI and Accelerated Compute-Driven Innovations
     • Synopsys Showcases EDA Performance and Next-Gen Capabilities with NVIDIA Accelerated Computing, Generative AI and Omniverse
2. Semiconductor (Chip) Stocks: up 5.2% this week; up 4.5% MTD
   • Description:  The price of AI chip stocks surged by 64% in 2023 and many analysts think there is an excellent chance that the boom will continue in 2024 and this portfolio tracks the stock performances of the major players in this category.
   • 15 Constituents: MU (+18.2%), AVGO (+9.6%), LRCX (+7.5%), NVDA (+7.3%), AMAT (+5.8%), ATEYY, ASML, ENTG,  KLAC, MKSI, MPWR, MRVL, QCOM, TSM. and AMD (-6.0%) 
   • Articles:
     • Micron Stock Jumps To Record High After Strong Earnings, Upbeat Guidance
     • Elon Musk companies are gobbling up Nvidia hardware even as Tesla aims to build rival supercomputer
     • Applied Materials Raises Dividend by 25%
3. Cybersecurity Software Stocks: up 2.0% this week; down 4.4% MTD
   • Description: Given the anticipated 14% increase in spending on cyber security in 2024, this portfolio tracks the performance of the largest cyber security software stocks expected to realize sizable returns again in 2024.
   • 10 Constituents: TENB (+5.3%), CRWD, (+3.7%), CYBR, (+3.5%), S (+3.1%), CHKP, PANW, QLYS, ZS, FTNT,  and VRNS (-1.9%)
   • Articles:
     • Tenable Delivers Zero Trust Cloud Functionality for Kubernetes
     • CrowdStrike Collaborates with NVIDIA to Advance Cybersecurity with Generative AI
4. AI-enabled Personal Computer Stocks: up 1.9% this week; up 8.5% MTD
   • Description: A computing revolution is beginning as a result of the introduction of neural processing units in the latest chip designs which will result in a coming decade of growth in PC upgrades and innovation. This portfolio tracks the stock performances of the companies that have introduced, or plan to introduce, AI-enabled PCs in 2024.
   • 4 Constituents: DELL (+4.2%), MSI, LNVGY and HPQ, (-1.2%)
5. AI-Powered Drug Discovery Stocks: up 1.8% this week; up 0.4% MTD
   • Description: AI-powered drug discovery holds massive potential to increase the accessibility of drugs and to treat presently incurable conditions and this portfolio highlights the most prominent clinical-stage biopharma tech companies using AI to power their research and development.
   • 8 Constituents: LTRN (+22.4%), BTAI (+4.9%), SDGR, ABCL, ABSI, RLAY, RXRX (-6.5%) and EXAI (-8.2%)
   • Articles: 
     • Lantern Pharma Reports Fourth Quarter & Fiscal Year 2023 Financial Results and Business Highlights
     • BioXcel Therapeutics Reports Financial Results for the Fourth Quarter and Full Year 2023
     • Exscientia Business and Financial Update for the Full Year 2023
6. Quantum Computing Stocks: up 0.7% this week; up 1.7% MTD
   • Description: Quantum computing is still years away but it will change the world when it arrives and, as such, it is important to keep abreast of the major companies involved in its research and development and this portfolio does just that.
   • 9 Constituents: MU (+18.2%), BIDU, HON, IBM, INTC, IONQ, AMD (-6.0%), QBTS (-6.7%) and RGTI, ( -17.3%)
   • Articles:
     • Micron Stock Jumps To Record High After Strong Earnings, Upbeat Guidance
     • Rigetti Computing Reports Fourth Quarter and Full Year 2023 Results
     • AMD Stock Has Stumbled Amid Pause in AI Chipmaker Rally—Watch This Key Price Level
7. Cloud Computing Stocks: down 1.2% this week; down 4.6% MTD
   • Description:  The cloud computing market is forecast to expand at a 17% CAGR between 2022 and 2027 which should bode well for the stock performances of the cloud computing companies that this portfolio tracks.
   • 8 Constituents: ANET (+10.3%), PSTG (+4.5%), DDOG (+2.2%), DBX (+2.2%), DLR, VRSN, BOX (-3.0%), and EQIX (-5.8%) 
   • Articles:
     • AI talk is surging during company earnings calls — and so are those companies' shares
     • Pure Storage Accelerates Enterprise AI Adoption to Meet Growing Demands with Nvidia AI
     • Equinix Stock Slumps on Activist Investor Hindenburg's Short

The AIQ Global X Artificial Intelligence & Technology ETF (AIQ) of 91 constituents, which best reflects the AI sector as a whole, was up 2.6% last week and is up 2.1% MTD.

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