3 AI Stocks to Buy Now for Under $5,000

If you have $5,000 to invest in the market, focusing on artificial intelligence (AI) stocks can offer significant long-term growth. These companies are at the forefront of technological advancements and are trading at attractive valuations, making them excellent buys. Here are three AI stocks to consider:

Taiwan Semiconductor Manufacturing (TSMC) is a global leader in chip manufacturing, supplying 90% of the world's advanced chips, including those crucial for AI. The company's sales for the first three months of the year reached $25.5 billion, marking a 35% year-over-year increase. With high profit margins of around 40%, TSMC's efficient operations and low-cost production in Taiwan give it a competitive edge. As AI continues to expand, TSMC is poised to see a significant uptick in demand. Currently trading at less than 23 times its future earnings, TSMC is undervalued compared to the average S&P 500 stock, making it an attractive investment.

Alibaba Group Holding (BABA), a China-based tech giant, is another compelling AI investment. Alibaba's diverse business portfolio includes cloud computing, e-commerce, digital media, and entertainment. The company's cloud computing division, Alibaba Cloud, is one of the world's leading providers, powering numerous AI applications. Alibaba's strong presence in China's booming tech market and its ongoing investments in AI research and development position it for substantial growth. Despite its current valuation, Alibaba's potential for innovation and expansion makes it a promising choice for investors.

Dell Technologies (DELL) is a major player in the technology sector, offering a wide range of products and services, including AI solutions. Dell's focus on enterprise solutions, data centers, and cloud computing makes it a valuable player in the AI ecosystem. The company's strong financial performance and strategic acquisitions have strengthened its position in the market. Dell's stock currently trades at a reasonable multiple, making it an affordable option for investors looking to capitalize on the AI revolution.

These three stocks not only offer exposure to the growing AI market but also trade at valuations that suggest significant upside potential. By investing in TSMC, Alibaba, and Dell, you can position your portfolio to benefit from the ongoing technological advancements in AI. Whether you're a seasoned investor or just starting out, these companies provide a solid foundation for a diversified and growth-oriented investment strategy.