AI Market Growth: Key Players to Watch in 2023

Recent tariffs and trade restrictions during President Donald Trump’s administration have temporarily slowed the artificial intelligence (AI) bull market. The benchmark S&P 500 has retreated 3.6% since the year’s outset. Despite this short-term volatility, analysts foresee the AI market reaching an impressive $1.8 trillion in total value by 2030.

U.S. and Chinese technology giants are ramping up AI development timelines and investing hundreds of billions in necessary infrastructure. This advanced infrastructure is poised to transform sectors, including healthcare diagnostics, autonomous transportation, and personalized education.

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As an investor focusing on long-term growth, I am positioning my portfolio to leverage this technological turning point. I intend to accumulate shares from three companies noted for their exceptional AI capabilities, established market presence, and financial resilience to navigate the current volatility. Read on to discover these three remarkable tech giants.

Leading the Charge in AI Acceleration

Nvidia (NASDAQ: NVDA) holds a commanding lead in AI hardware and software. CEO Jensen Huang recently stated that the “vast majority” of AI inference executes on Nvidia’s platforms. Despite a year-to-date drop of 12.3%, Nvidia shares currently trade at a low 26.2 times forward earnings, presenting an attractive entry point for this robust company. Upcoming launches, including Blackwell Ultra this year and Vera Rubin in 2026 followed by Rubin Ultra in 2027, establish a clear growth path for Nvidia.

Nvidia’s edge over its competitors lies not just in superior graphics processing units (GPUs) but also in its proprietary Compute Unified Device Architecture (CUDA) software, which creates significant switching costs for AI developers.

While several tech firms, including Advanced Micro Devices (AMD), are investing in custom chips, Nvidia’s integrated hardware and software ecosystem enables it to maintain a leading market position for the foreseeable future. This combination of technical excellence, ecosystem lock-in, and strategic expansion into new AI domains makes Nvidia an essential player in the AI infrastructure landscape.

Dominating AI and Search Technologies

Alphabet (NASDAQ: GOOG) (NASDAQ: GOOGL) has emerged as a technology powerhouse, controlling a variety of business sectors from advertising to cloud computing and AI. Although down 12.7% year to date, the search giant’s Stock trades at just 18.6 times forward earnings, presenting compelling value in the fast-growing tech space. As Google Search remains the core revenue driver, Alphabet ramps up AI investments to enhance its search features and strengthen competitive positioning in cloud services and robotics.

The firm is focused on sustaining its dominant position in advertising while expanding its Google Cloud Platform (GCP), which stands to gain from the increased migration of workloads and AI implementation over the next five years. Additionally, Alphabet’s significant cash reserves allow for ongoing investments in both established sectors and emergent technologies like robotics.

Despite facing scrutiny regarding its search dominance, the company’s diverse capabilities across digital advertising, cloud infrastructure, and AI development position it as a central technology investment with multiple growth avenues. As such, Alphabet emerges as a crucial Stock for an AI-themed portfolio.

Cloud Infrastructure and AI Powerhouse

Microsoft (NASDAQ: MSFT) stands as a leader in cloud infrastructure and AI, aided by its Azure platform and a strategic partnership with OpenAI. Following a 7.2% year-to-date decline, Microsoft shares are trading at an appealing 26.1 times forward earnings, offering investors a valuable entry point into this dynamic sector. Notably, Microsoft Stock used to trade above 35 times forward earnings at the same time last year.

Azure, presently a $75 billion business, boasts a remarkable 30% growth forecast for fiscal 2024, serving as a cornerstone of Microsoft’s strategy that powers hybrid cloud frameworks and advances innovations in AI and the Internet of Things (IoT). Furthermore, Microsoft’s dominance in operating systems and productivity software ensures a steady cash flow, which supports ongoing investments in cloud and AI product offerings.

With accelerating cloud adoption and a growing integration of AI across its offerings, Microsoft is exceptionally well-positioned for long-term success. Consequently, this tech Stock is a foundational element for AI investors.

Should You Invest $1,000 in Nvidia Right Now?

Before purchasing Stock in Nvidia, consider the following:

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Reflect on Nvidia’s past performance: when it made the list on April 15, 2005, investing $1,000 would have grown to $721,394!*

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Suzanne Frey, an executive at Alphabet, serves on The Motley Fool’s board of directors. George Budwell has positions in Microsoft and Nvidia. The Motley Fool holds positions in and recommends Advanced Micro Devices, Alphabet, Microsoft, and Nvidia. The Motley Fool endorses the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.

The views and opinions expressed herein belong to the author and do not necessarily reflect the views of Nasdaq, Inc.