How To Invest In AI Stocks In Australia: On ASX & Global

 

The rapid advancement of artificial intelligence technology has made it a focal point of growth in the tech sector.

 

Buoyed by ChatGPT and other AI-focused services, investors look to benefit from AI's potential and the profits it could bring. It has made AI share trading in Australia immensely popular in recent months.

 

If you have an interest in investing in AI stocks, delve into the world of AI equities. Discover what AI stocks encompass, their potential, methods for investing in them, and prominent AI companies listed on the ASX.

 

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1. Can You Invest In AI (Artificial Intelligence) in Australia?

 

Several entry points are available for investors in Australia who want to capitalise on the AI market's meteoric rise and growth potential. Trading or investing in AI stocks is one of them.
 

However, one must practise due diligence before trading and consult their financial advisor to determine the most appropriate tech investments.

 

 

2. Why Invest In Artificial Intelligence Shares?

 

From self-driving vehicles to healthcare equipment, Artificial intelligence is ingrained into everything.

 

Research and innovation are key factors driving the adoption of this specialist technology across industry verticals, including automotive, healthcare, manufacturing, retail, and finance.

 

The artificial intelligence market is enormous, growing to US$5 billion in 2023. With an annual growth rate of 17.35% between 2023 and 2030, the value of the AI market is expected to reach US$15bn by 2030.

 

Artificial intelligence will likely transform how companies generate value as new AI solutions enter the Australian market.

 

AI shares can offer considerable growth opportunities and an accelerated rate of innovation due to improved accessibility to rich data sets.

 

Investors interested in AI who want to hold consistent ASX performers can benefit from the innovative abilities of leading companies with massive datasets.

 

However, before investing, they must weigh the risks based on the company’s long-term prospects.

 

 

3. What Are ASX Artificial Intelligence Stocks?

 

AI stocks are shares in ASX-listed companies that operate in artificial intelligence (AI)-related projects. These companies use AI to deliver products, services, or applications.

 

They can be:

 

• Software (cloud computing) firms,

• Hardware manufacturers/chip makers, or

• Firms distributing AI technology or research facilities. 

 

AI stocks aren’t limited to the tech sector. AI-enabled applications are developed across various industries, including healthcare, finance, manufacturing, marketing, education, and resources.

 

However, artificial intelligence is still in its initial days in Australia. While various tech companies are involved in AI projects, only a handful of ASX-listed companies incorporate AI as a core part of their offering. Most of these AI stocks on the ASX are small or micro-cap startups.

 

As more businesses look for ways to integrate AI into their operations, the economic influence of AI is projected to grow substantially.

 

 

 

4. How To Invest In Artificial Intelligence In Australia?

 

You can buy AI stocks on the ASX via a full-service broker or an online share trading platform.

 

If you want to avoid the hassle of researching individual shares in AI companies, consider buying and gaining exposure to AI stocks via an exchange-traded fund (ETF).

 

If you still need a share trading account, consider eToro, which is used by many investors in Australia and worldwide. You can create an eToro trading account HERE.

 

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Here Are The Steps To Invest In AI Stocks on ASX via ASX-Listed Stocks or ETFs:

 

 

Step 1: Create a Brokerage Account with a Stockbroker

 

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Make sure the broker:

 

• Is ASIC-regulated

• Easy to use

• Offer access to the desirable stock markets

• Charges affordable brokerage and foreign exchange fees

• Charges reasonable minimum and maximum withdrawal limits

 

 

Step 2: Research AI Companies

 

Find out all about the company, such as:

 

• The type of business it is engaged in

• How it generates revenue

• How much cash reserves and debt it has

• Details of future partnerships and product roadmaps

• Reading expert opinions and tracking the stock performance can help you understand its share price movement.

 

Suppose the company fits your investment strategy and is positioned to expand steadily and reliably to generate returns. In that case, you could consider investing in it.

 

Based on your clear investment goals and risk appetite, you could  buy individual shares of AI companies or AI-focussed ETFs that allow you to invest a small amount regularly in a diversified mix of global shares.

 

 

 

5. Different Ways To Invest In Artificial Intelligence In Australia

 

There are three ways to invest in Artificial Intelligence:

 

 

Method 1: ASX-Listed AI Companies

 

The AI market is relatively young, and most ASX-listed AI stocks have small market capitalisation.

 

However, considering the widespread adoption of AI applications in varied industry sectors, AI will likely continue expanding with new AI trends to impact most industries worldwide over the next decade.

 

Thus, investors can expect to have diverse AI investment opportunities in Australia. However, as AI stocks are relatively new and yet to prove themselves commercially, the share prices of ASX-listed AI companies can be volatile. It can make them a risky investment option.

 

Therefore, investors should thoroughly research the company’s business model, challenges, and growth prospects before investing.

 

 

Method 2: US-Listed AI Stocks

 

Investors wishing to invest in overseas AI stocks can consider some well-known NASDAQ-listed tech firms at the forefront of the AI revolution and introduce AI-driven apps and technologies.

 

Some of these include:

 

• Microsoft (NASDAQ: MSFT)

• Alphabet Inc (NASDAQ: GOOGL)

• Amazon.com Inc (NASDAQ: AMZN)

• NVIDIA Corporation (NASDAQ: NVDA)

• Workday, Inc (NASDAQ: WDAY)

• Salesforce Inc (NYSE: CRM) 

• Palantir (NYSE: PLTR)

 

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

Method 3: Artificial Intelligence ETFs (Exchange Traded Funds)

 

Investors looking to invest in multiple leading AI companies can consider investing in AI-focused ETFs.

 

They expose you to a collection of AI companies in a single trade. This way, your investment diversifies across different AI stocks, and the risks involved in individual stock selection are also reduced.

 

RBTZ Global Robotics and Artificial Intelligence ETF is an ASX-listed AI-themed ETF. There is also the NDQ NASDAQ 100 ETF for investment in overseas stocks, which gives exposure to Microsoft, Alphabet (Google), Amazon, NVIDIA, and other related companies.

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

6. What Are Some Popular AI Stocks Listed on ASX?

 

Only a dozen AI stocks listed on the ASX operate chiefly in AI.

 

However, we can expect more to come in the coming years. In descending order, we have listed popular AI companies on ASX ranked by market capitalisation:

 

1. WiseTech Global (ASX: WTC), Market cap: AU$24.61 billion 

2. Xero (ASX: XRO), Market cap: AU$16.56 billion 

3. TechnologyOne (ASX: TNE), Market cap: AU$5.33 billion 

4. Hub24 (ASX: HUB), Market cap: AU$2.05 billion 

5. Brainchip Holdings Ltd: (ASX: BRN), Market cap: $728M

6. Appen Ltd (ASX: APX): Market cap: $443M

7. Bigtincan Holdings Ltd (ASX: BTH), Market cap: $307M

 

 

Other AI stocks:

 

• Dubber (ASX: DUB)

• Ai-Media Technologies Limited (ASX: AIM)

• IMDEX Ltd (ASX: IMD)

• NextDC Limited (ASX: NXT)

• Unith Limited (ASX: UNT) 

• Altium (ASX: ALU)

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

 

7. Are AI Stocks Risky?

 

The drawback of AI stock investing is the challenge of identifying the winners from the losers. Also, the future growth potential for AI-powered companies will likely be affected by emerging competition, obsolescence, or future regulation.

 

AI-ETFs also involve risks. Investors are exposed to this fast-progressing industry with the possibility of large-scale disruption.

 

As several newly launched AI technologies are commercially unproven, investing in AI stocks should be considered only a portion of a broader investment portfolio.

 

 

8. Are AI Stocks a Good Long-Term Investment?

 

Whether artificial intelligence stocks on ASX are worth investing in depends on your current financial situation and investing objectives. These shares suit investors with a longer time horizon and are comfortable taking risks.

 

The increasing involvement of Artificial Intelligence in technology has the power to transform the world. So, investors who get in early in AI stocks are in the best position to take advantage of this transformation.

 

However, as AI is still developing, companies in this sector may be relatively untried, prone to trouble by competitors, or not highly profitable. Due to this, you will see high volatility in these stock’s prices.

 

Also, it may be challenging for non-experts to keep up with the varying aspects of specialist technology, such as machine learning, pattern recognition, and predictive modelling, and their impact on businesses. Thus, doing meticulous research on AI stocks is vital.

 

For beginner investors who lack stock-research skills, AI-themed ETFs can be a great way to get exposure to the leading companies in the sector.

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

9. What Is The Forecast for AI Stocks in 2030?

 

The growth of AI in Australia is driven by its potential to create jobs, enhance lives, and boost economic growth.

 

Constant research and innovation driven by the tech giants leads to increased adoption of advanced technologies in the automotive, retail, finance, healthcare, and manufacturing industries.

 

For instance, medical centres are increasingly adopting AI and machine learning algorithms to precisely predict ailments in their initial stages based on past health records.

 

Though AI is currently in an initial development phase, it is being quickly adopted by businesses industry-wide. Due to this, more and more investors are putting their funds into AI-related ventures.

 

AI stock investment is an excellent opportunity for investors to capitalise on market changes driven by AI adoption. However, investors should consider their market knowledge, financial situation, and risk appetite before investing in AI stocks.

 

 

 

10. How Much is Invested in Artificial Intelligence?

 

AI has become a prime focus for the Australian government.

 

As per the 2023-24 financial year budget, the government outlines a plan to invest AU$101.2 million in adopting and developing artificial intelligence over the coming years.

 

 

11. Can You Buy OpenAI Shares in Australia?

 

Open AI is one of the few companies that have taken the world by storm. The company's ChatGPT chatbot became a viral sensation in 2022 and has over 100 million users.

 

Unfortunately, you cannot buy Open AI shares directly on ASX. Also, the company's CEO, Sam Altman, has no plans to bring an IPO for two main reasons:

 

• No additional capital requirement

• It could limit its ability to develop AI fully.

 

So, you can’t buy ChatGPT developer “Open AI” shares on ASX right now. Also, there is no timeline for when you can do so.

 

Investors who wish to capitalise on Open AI’s growth potential and high demand and know how to buy OpenAI stock before IPO could invest in stocks of other publicly traded companies that invest in OpenAI. These include:

 

• Microsoft (NASDAQ: MSFT)

• Nvidia (NASDAQ: NVDA)

• Intel (NASDAQ: INTC)

• Alphabet (NASDAQ: GOOG).

 

These companies stand to benefit from the explosion in AI that OpenAI has helped ignite.

 

They have teamed up with OpenAI to build new AI supercomputing technologies and integrate OpenAI's technology into their existing applications.

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

 

12. Frequently Asked Questions (FAQs)

 

 

How Many AI Companies Are There?

 

Although AI-enabled services offer limitless benefits to businesses, the AI market in Australia is still small.

 

Only a few ASX-listed companies currently work on the frontlines of AI tech development. However, this is estimated to expand with time.

 

 

What Are Popular ETFs To Invest in AI?

 

If you prefer investing in a portfolio of AI-themed companies, then an ASX Artificial Intelligence ETF could be a safer choice (no guarantee). If one company fails, you are supported by others in the portfolio.

 

Some ETFs in Australia listed on ASX are:

 

• BetaShares Global Robotics and Artificial Intelligence ETF (ASX: RBTZ)

• Global X Global Robotics & Automation ETF (ASX: ROBO)

• Global X FANG+ ETF (ASX: FANG)

• Global X Morningstar Global Technology ETF (ASX: TECH)

• BetaShares NASDAQ 100 ETF (ASX: NDQ).

• BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC)

• GlobalX Semiconductor ETF (ASX: SEMI)

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

What Company Is Leading The AI Race?

 

Appen Ltd (ASX: APX) is a global leader in offering a wide range of data to power AI products. Some of its clients include tech giants such as Google, Amazon and Microsoft.

 

Appen sources and interprets video, image, audio, 3D sensor, text, and multi-modal data to help develop and improve AI systems.

 

 

 

Who is The World Leader in AI?

 

After the partnership with ChatGPT's parent company, OpenAI, Microsoft is now globally recognised as a leading Artificial Intelligence stock.

 

 

What Is The Price Prediction For AI Stocks?

 

Based on Global consultancy PwC reports, AI has the potential to transform into a big business. It could contribute up to USD 15.7 trillion to the global economy by 2030.

 

The company projects the GDP for local economies from AI can rise by 26% by 2030. Thus, AI technology is a worthwhile investment that can transform the productivity and GDP potential of the worldwide economy.

 

 

What Will The AI Market Be Worth in 2025?

 

Australia's spending on AI systems is expected to grow to $3.6 billion in 2025, at a compounded annual growth rate of 24.4% between 2020-25.

 

 

 

Does Vanguard Have an AI ETF?

 

Vanguard doesn’t have any specific AI-focussed ETF.

 

However, Vanguard S&P 500 ETF exposes investors to several influential global companies whose share prices rise amid rising demand for AI-driven software and services.

 

It implies that the Vanguard S&P 500 ETF investors will benefit from the Artificial Intelligence boom on a certain level.

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

Who Is The Largest Shareholder of OpenAI?

 

OpenAI has amazed the technology world with its viral artificial intelligence products and its mind-boggling $10 bn worth of backing from Microsoft Corporation.

 

Now, many small and large companies are racing to overtake the startup in the hot world of AI services.

 

Microsoft is the largest shareholder of OpenAI, with a current ownership of 49 per cent. Existing shareholders (49 per cent) and the OpenAI non-profit foundation own the remaining percentage.

 

 

What Is The Name of The OpenAI Coin?

 

Worldcoin (WLD) is a cryptocurrency project OpenAI CEO Sam Altman started. He aimed to redefine the digital identification process by offering a World ID to users to help them verify that the ID's owner is a real human.

 

If the initiative succeeds, it could increase economic opportunity, enable global democratic processes, and scale a trusted solution to differentiate humans from AI online while protecting privacy.

 

 

 

What Publicly Traded Companies are Like OpenAI?

 

Public AI companies must distribute their resources among several investors. Still, they also benefit from a larger investor pool.

 

Trading public stocks makes raising funds for new projects and business growth convenient. Such agility is essential for the rapid-paced AI space that has quickly evolved with the releases of ChatGPT, GPT-4, and Lensa.

 

It is worth noting that public companies are subjected to more regulations than private companies and are required to share financial information with regulatory bodies like the Securities and Exchange Commission.

 

It is a beneficial practice that promotes transparency and enables investors to make informed decisions about their investment allocation. Here are a few publicly traded AI companies to watch out for:

 

 

IBM

 

• Stock Symbol: IBM

• Year of establishment: 1911

• Location: Armonk, New York 

 

 

Google

 

• Stock Symbol: GOOG

• Year of establishment: 1998

• Location: Mountain View, California

 

 

John Deere (DE)

 

• Stock Symbol: DE

• Year of establishment: 1837

• Location: Moline, Illinois 

 

 

 

Salesforce CRM

 

• Stock Symbol: CRM

• Year of establishment: 1999

• Location: San Francisco, California

 

 

Micron Technology

 

• Stock Symbol: MU

• Year of establishment: 1993

• Location: Santa Clara, California

 

 

Nvidia

 

• Stock Symbol: NVDA

• Year of establishment: 1993

• Location: Santa Clara, California 

 

 

Synopsys Inc.

 

• Stock Symbol: SNPS

• Year of establishment: 1986

• Location: Mountain View, California

 

 

Splunk

 

• Stock Symbol: SPLK

• Year of establishment: 2003

• Location: San Francisco, California

 

 

 

Veritone

 

• Stock Symbol: VERI

• Year of establishment: 2014

• Location: Remote

 

 

QuickLogic Corporation

 

• Stock Symbol: QUIK

• Year of establishment: 1988

• Location: San Jose, California

 

 

BrainChip

 

• Stock Symbol: BRN

• Year of establishment: 2013

• Location: Laguna Hills, California 

 

 

Netflix

 

• Stock Symbol: NFLX

• Year of establishment: 1997

• Location: Los Gatos, California

 

 

Always seek the help of a professional financial advisor before making any investment decision. Investing carries risk. The above are just some general options for educational purposes. All these options come with risk. This is not financial advice.

 

 

How Good Is AI at Stock Trading?

 

Artificial Intelligence has evolved as a game-changer, enabling investors with robust tools and insights to sail through the dynamic stock market world.

 

Here is how this advanced technology reshapes the investment landscape:

 

 

Highly Efficient Data Analysis

 

AI algorithms can process bulk financial data in real-time, which helps investors make better and quicker data-driven decisions.

 

Additionally, AI can rapidly recognise data patterns and extract meaningful insights that can impact investment strategies.

 

The powerful AI tools can help investors evaluate market trends, a company’s performance, and risk factors more efficiently than before.

 

 

Real-Time Trade Execution 

 

AI-algorithmic trading is gaining traction among hedge funds and institutional investors for the following reasons:

 

• AI’s algorithm, i.e., quantitative trading model, relies on mathematical models and predetermined rules to execute trades at high frequencies and speeds.

• It can analyse news sentiments, market data, and other factors to form split-second trading decisions. 

• The algorithm exploits market inadequacies, takes advantage of temporary share price inconsistencies, and more efficiently manages risks.

 

 

Risk Management

 

AI-driven algorithmic systems can find unusual trading patterns, fraudulent activities, and potential market manipulations faster than humans.

 

These complex algorithms can monitor vast data sets and flag suspicious activities in real time. This ability benefits market participants and regulators in maintaining investor confidence and market integrity.

 

 

Advanced Investment Strategies

 

Earlier, advanced techniques and investment strategies were only available for institutional investors and hedge fund traders.

 

However, with AI-driven investment platforms, retail investors can access advanced investment strategies and create personalised investment portfolios based on risk tolerance, market conditions, and financial goals.

 

Overall, the fast progression in AI technology has transformed how people invest in the stock market. As the technology continues to emerge, it will become an inevitable tool for investors.

 

 

13. Conclusion

 

With the rising interest in AI among individuals and the expanding investments made by companies in enhancing their AI capabilities, AI stocks could potentially offer a strong and enduring investment opportunity. However, one must first consider the risk before investing in AI companies.

 

It is crucial to thoroughly evaluate a company's revenue-generating potential and competitive position before making an investment decision. Also, seeking help from a financial advisor before investing is also essential.

 

If you still need a share trading account, consider eToro, which is used by many investors in Australia and worldwide. You can create an eToro trading account HERE.

 

eToro Service ARSN 637 489 466 promoted by eToro AUS Capital Limited ACN 612 791 803 AFSL 491139. Capital at risk. See PDS and TMD. Zero commission does not apply to short or leveraged positions. Zero commission means that no broker fee has been charged when opening or closing the position. Limited stock exchanges only.

 

 

 

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