Remember Jarvis from Iron Man? The super-intelligent AI that helped Tony Stark save the day? AI isn’t just a cinematic concept anymore; it’s rapidly becoming reality. Imagine a world in which AI, like JARVIS, predicts our wants rather than simply answering them. And, guess what? This future is closer than you realize!
According to Statista, the AI market will grow to $827 billion by 2030, from $184 billion in 2024.
AI, like renewable energy, is emerging as one of the most promising investment prospects available. So, how can you capitalise on this wave and invest in AI stocks, particularly in India? Let us find out.
Let us first define what AI stocks are.
What Are AI Stocks?
Artificial intelligence (AI) equities are shares of firms active in the field of AI. This could include creating AI software, constructing gear optimized for AI processes, or offering AI-powered services. Machine learning, natural language processing, computer vision, and generative AI are among the most important AI technologies.
However, not all firms who claim to be in the AI space are genuinely in it. Some are actually pushing AI innovation, while others are simply riding the hype wave.
So, let’s see how you may go about seeking AI investments in India.
An overview of the top AI stocks in India based on performance
| Company | Market Cap (in Rs.Cr) | Promoter Holding% | PBDIT Margin% | Dividend Yield | Net Profit Margin% | Nifty 50 |
| TCS | 16,15,548 | 71.77 | 31.19 | 1.64 | 21.52 | Yes |
| INFOSYS | 7,95,591 | 14.61 | 30.38 | 2.40 | 21.12 | Yes |
| HCL Technologies | 4,83,819 | 60.81 | 37.30 | 2.92 | 14.29 | Yes |
| Wipro | 2,72,725 | 72.82 | 22.05 | 0.19 | 12.38 | Yes |
| Tech mahindra | 1,57,199 | 35.05 | 8.61 | 2.49 | 4.61 | Yes |
| Subex | 1,589 | – | -12.70 | – | -61.90 | No |
| Happiest minds | 12,555 | 44.22 | 27.16 | 0.70 | 15.29 | No |
| Saksoft | 3,456 | 66.64 | 20.02 | 0.25 | 12.63 | No |
| Tata Elxsi | 48,461 | 43.92 | 32.89 | 0.90 | 22.30 | No |
| Kellton Tech | 1,408 | 51.67 | 15.41 | – | 6.51 | No |
Statistics as of September 12, 2024.
Looking to Invest in AI in India
It’s not as hard as you may assume to find AI investments in India. To begin your investigation, a quick internet search will yield a number of articles detailing AI stocks.
In India, a few of the often discussed AI stocks are:
- TCS, Infosys, Wipro, Tech Mahindra, and HCL Technologies are major IT players.
- Affle India, Datamatics, Saksoft, and Kellton Tech Solutions are smaller, specialized firms.
- Persistant Systems, Tata Elxsi, BOSCH, and L&T Technology Services are some of the other top AI stocks.
Even though big IT firms can afford to spend a lot of money on AI advancements, they might not instantly see a noticeable increase in revenue from AI.
Again, lower, AI- concentrated businesses like Saksoft and Datamatics may have lesser room for expansion, but they also carry lesser threat because of request insecurity. Consider Kellton Tech as an illustration. Kellton Tech provides services in AI and ML in addition to its other business sectors.
The three- time profit increase for Kellton is negative. It has a veritably low ROE. At the moment, it’s losing plutocrat.
thus, it might not be a good pot to stake on.
Kellton Tech: Important financial data |
|
| Market capitalization (Rs cr) | 1408 |
| 3Y sales growth (percentage) | 0.29 |
| 3Y rise in net profit | -9.3 |
| 3Y average ROE | 1.0 |
| Equity to Debt | 0.29 |
| P/E | 21.99 |
| PEG | NA |
| Return on 3Y stock (% pa) | 14.9 |
| Statistics as of September 12, 2024. Growth in revenue and profit on a TTM basis. ROE on a fiscal year basis. PEG on a TTM basis based on 3Y EPS growth. | |
This implies that not every AI-related business is worthwhile to invest in. Therefore, don’t get excited just because a business is using artificial intelligence.
While it does seem to be in less than ideal shape right now, we are not claiming that Kellton is a bad company in and of itself or that it cannot turn around. Digging deeper and not relying solely on appearances is the objective.
Examine their annual reports and financials before thinking about investing in AI in India, regardless of your preference for placing bets on well-known companies or looking into opportunities with smaller, more specialized businesses.
Things to Take Into Account Before Purchasing Artificial Intelligence Indian stocks
- The AI strategy of the company: Verify whether the business has a sound AI plan. In annual reports, investor presentations, and other formal papers, look for references to artificial intelligence.
- Examine the company’s : financial health by looking at its return on equity (ROE), debt levels, profit margins, and sales growth. Seek out businesses with low debt, robust profit margins, and consistent sales growth.
- Position in the Market: Recognize the company’s competitive edge and market position. Does it lead the way in AI development, or does it lag behind its rivals?
- Investment Diversification: Take into account spreading your money among both major and minor AI companies. You can then weigh the possible dangers and benefits.
The Best Way to Invest in Indian AI Stocks
Exchange-traded funds (ETFs) that follow the performance of leading IT companies are among the most effective ways to get exposure to AI in India.
Consider the Nippon India ETF Nifty IT, which comprises well-known IT firms like TCS, Infosys, and Wipro, all of whom are improving their AI capabilities.
Remember, AI is still a small portion of their revenue pie, so it may be some time before these companies realize AI’s full potential.
Alternatively, you might go right to the source by investing in smaller startups that specialize on AI development, such as Datamatics or Saksoft. These companies have showed great growth, but they have higher risks, so investing in them necessitates extensive study and risk management.
Whether you go big with the titans or niche with the startups, there are numerous avenues to choose in the world of AI investing.
Advantages to Investing in AI Stocks
- High Growth Potential: AI is still in its early stages, with plenty of possibility for expansion as the technology advances and more businesses adopt it.
- Diverse Applications: From finance and healthcare to retail and logistics, AI is making waves in a wide range of industries, creating several chances for growth.
- Early Market Entry: Investing in AI stocks allows you to take advantage of future technology breakthroughs.
- Strategic acquisitions: Large corporations may purchase smaller AI-focused enterprises, potentially leading to high returns for investors in these equities.
What Are the Ten Stages That Determine How Far AI Can Go?
AI is more than just one thing; it progresses through various stages, each signifying a higher level of intellect and capabilities.
Here’s a quick overview of the ten stages of AI:
- Rule-Based AI: The most basic type, which follows simple, established rules—similar to your alarm clock or microwave.
- Context-Based AI: Smarter algorithms that consider context while making judgments. Like Siri, Alexa, or Amazon’s tailored recommendations.
- Narrow-Domain AI: AI designed for specific purposes, such as stock market trading algorithms that evaluate massive volumes of data.
- Reasoning AI: AI that can reason through complex situations and make logical judgments, such as ChatGPT or self-driving automobiles.
- Artificial General Intelligence (AGI) : is AI that can equal human cognitive capacities while operating thousands of times faster—your very own JARVIS.
- Super Intelligent AI: A potential scenario in which AI outperforms human intelligence in all domains.
- Self-Aware AI: AI that is conscious, self-aware, and understands its own existence.
- Transcendent AI: artificial intelligence that outperforms humans in terms of creativity and problem solving.
- Cosmic AI: AI capable of interacting with or manipulating cosmic occurrences.
- God-like AI: The final stage in which AI can achieve omnipotent capabilities—truly the stuff of science fiction.
Currently, most AI investments are in the first three stages, but future breakthroughs could propel us closer to AGI or perhaps further.
Wrapping Up
Investing in AI stocks can provide an excellent opportunity to capitalize on the rapid expansion of this disruptive technology. However, keep in mind that, while AI provides numerous benefits, it also poses significant threats.
Before making any investment decisions, it is vital to conduct thorough research, diversify, and grasp the company’s AI strategy. As AI evolves, remaining aware and adaptable will be essential for capitalizing on the AI revolution.
So, are you prepared to surf the AI wave?
FAQs
Which are India’s top artificial intelligence companies?
BOSCH, Tata Elxsi, TCS, Infosys, Wipro, Tech Mahindra, HCL Technologies, Affle India, Datamatics, Saksoft, and Kellton Tech Solutions are among the leading corporations investing in AI.
How should artificial intelligence enterprises be valued?
To value AI enterprises, first examine their AI strategy and how it’s described in their reports. Next, examine their financials — harmonious growth, strong profit perimeters, and low debt are critical. Consider their request position Are they a leader or a lingerer? Eventually, diversify your investments among numerous AI enterprises to balance threat and price.
Why Should You Invest in India’s AI Stock Industry?
Given the promise of this growing technology, investing in Indian AI stocks could be a wise decision. According to Statista, the worldwide artificial intelligence market will rise from $184 billion in 2024 to $827 billion by 2030. AI, like renewable energy, is an emerging technology with enormous potential for growth and innovation.
What are the top three AI stocks in India by market capitalization?
As of September 12, 2024, the top three AI stocks by market capitalization are:
1) TCS – Rs. 16,10,754 crore.
2) Infosys – Rs. 7,95,051 crore.
3) HCL Technologies – Rs. 4,83,765 crore.
Which NSE AI stocks are included in the Nifty 50 index?
TCS, Infosys, HCL Technologies, Wipro, Tech Mahindra, and L&T are included in the Nifty 50 index.
