Four Large Income-paying Artificial Intelligence Stocks to Purchase

Four large income-paying artificial intelligence stocks to purchase feature some of the best-known names in technology.

The four large income-paying artificial intelligence stocks to purchase each are positioned to seize opportunities as one of the hottest technology in years is gaining buzz and adding appeal to industry stalwarts that also pay dividends. Companies that have not been widely considered cutting-edge in recent years suddenly are gaining increased attention and may be worth buying.

One of the four large income-paying artificial intelligence stocks to purchase is International Business Machines (NYSE: IBM), of Armonk, New York, an early developer of both business machines and personal computers but now introducing AI capabilities. The company’s management held IBM’s Think 2023 event in Orlando, Florida, on May 9, with CEO Arvind Krishna, CFO Jim Kavanaugh and other senior management discussing many of their AI initiatives.

Four Large Income-paying Artificial Intelligence Stocks to Purchase Launch New Products

IBM announced its WatsonX Platform at the event generative AI, offering a development studio, data store and governance toolkit, according to a recent report from BofA Global Research. The company’s management expects to monetize AI first through services and later in software as adoption of the technology scales, BofA added.

BofA maintains a “buy” recommendation on IBM due, in part, to the defensive nature of the business and attractive current dividend yield of  that should limit downside. IBM intends to offer the WatsonX Platform on top of RedHat OpenShift providing portability, modernization and standardization of workloads, BofA added

“IBM’s horizontal incumbency across enterprises gives it an opportunity to monetize the adoption of AI across workloads,” BofA wrote in a recent research note.

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IBM’s foundational models — tested for last several years on large GPU clusters using IBM data — let business customers skip a significant part of the training phase of AI that can be expensive and time consuming, allowing for faster time to market,  BofA noted.

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IBM Leads Four Large Income-paying Artificial Intelligence Stocks to Purchase

IBM’s management expressed interest in AI largely automating back-office functions, such as data entry, human resources (HR) process automation and repetitive jobs, BofA wrote. The IBM leaders estimated that 30% of such 28,000 current back office jobs at the company ultimately can be replaced by AI.

Companies that have vertical business models that provide a single function are most at risk of either being automated through AI, BofA wrote. IBM officials said AI can enhancing both consulting growth and margins, BofA added.

“On the one hand, the increased interest in AI will drive more consulting deals focused on digital transformation and with relatively quick payback periods,” according to BofA. “On the other hand, in some areas IBM will be able to improve margins through utilization of less labor for certain types of deals: business process optimization. In these instances, resources will need to be re-skilled.”

Skousen Champions Artificial Intelligence Investments Such as IBM

Mark Skousen, PhD, an economist who serves as a Presidential Fellow at Chapman University and heads the Forecasts & Strategies investment newsletter, is recommending IBM in his Home Run Trader advisory service. Skousen, who is a descendant of founding father, diplomat and inventor Benjamin Franklin, also used to work for IBM as a consultant in the early 1980s.

“The firm helps businesses and governments reconfigure their IT departments for the cloud era,” Skousen wrote to his Home Run Trader subscribers. “It also ensures that technological systems are not only faster and more efficient, but far more secure.”

IBM allows organizations to boost innovation, productivity and resilience, as well as enabling them to scale up and cut costs, Skousen continued.

So far in 2023, the technology sector has soared into bull-market territory — generally defined as a rise of at least 20% — after a poor performance in 2022. Investors who can accept the ups and downs of volatility may be best suited for purchasing stocks like IBM that are gaining a lift from artificial intelligence advances.

Despite inflation, a tight Fed money supply and a brewing banking crisis after several recent financial institution failures, the NASDAQ Composite’s tilt toward technology has led to a 27.74% year to date, as of June 23.

Mark Skousen, head of Forecasts & Strategies, meets with Paul Dykewicz.

I expect to see and hear Skousen July 12-15 at the annual FreedomFest that he organizes that features a variety of investment, political and social opinion leaders who include former presidential candidate Steve Forbes, current presidential prospects such as former radio host Larry Elder and skilled trades advocate Mike Rowe, who hosts the popular “Dirty Jobs” TV series. Rowe, who I hope to interview there about how AI could might affect skilled trades workers who are in short supply, taped an amusing video about some of the reasons why he plans not only to attend FreedomFest but serve as a keynote speaker. To register for a discount, use the code EAGLE50. If you attend, be sure to drop by the Eagle Publishing booth to meet and talk to me personally.

As for IBM, Skousen described it as a world leader in AI. So, it’s not surprising that the company is reporting double-digit percentage earnings growth, he added.

“The firm is the global leader in quantum computing and owns the world’s largest fleet, with over 20 of the most powerful quantum systems,” Skousen wrote. “This new technology is widely expected to solve problems that today’s most powerful supercomputers cannot solve.”

Skousen, who also heads the TNT Trader advisory service that recommends both stocks and options, as Home Run Trader does, instructed subscribers to take a profit on May 25 of 323.96% by selling call options in Nvidia Corp. (NASDAQ: NVDA) that he recommended on May 2. The stock rose 34% in just a few months during the time Skousen recommended it, while the options sold in parts at varying levels to produce an average gain during the same time of 196%.

Microsoft Joins Four Large Income-paying Artificial Intelligence Stocks to Purchase

AI is starting to drive revenue growth at Redmond, Washington-based Microsoft (NASDAQ: MSFT) and is boosting use of the company’s many apps. One example is that Microsoft’s Bing web browser has quadrupled its downloads since Microsoft added an AI-aided chatbot.

Microsoft reported better-than-expected results for its fiscal third quarter, with its Microsoft Cloud up 25%. Now in its fiscal fourth quarter, Microsoft faces pressure from the macro environment, according to the Chicago-based investment firm William Blair. Microsoft’s management seemed more upbeat compared to prior earnings calls, the investment firm added.

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Even though growth of Microsoft Azure is expected to keep slowing, it still should reach mid-20% gains in the fourth quarter, with demand for AI infrastructure providing a tailwind, William Blair wrote in a recent research note. Microsoft’s tool consolidation sales pitch is “resonating” with cost-conscious customers who want to reduce the number of products and vendors they use in areas like collaboration, software development, security and workflow management, the investment firm wrote.

While the company is not yet out of the woods in terms of a slowing demand environment, as it laps tougher comparisons from fiscal 2022 and demand for AI-based services grows, expect healthy growth ahead and upside potential for the stock,” William Blair wrote.

Four Large Income-paying Artificial Intelligence Stocks to Purchase: Intel at Reduced Price

Skousen, who recommends Flying Five stocks in his Forecasts & Strategies investment newsletter each year, is recommending dividend-paying chipmaker Intel (NASDAQ: INTC), of Santa Clara, California. In the August issue of his newsletter each year, Skousen chooses five Dow stocks that have the lowest price from a list of the 10 highest-yielding Dow stocks.

Intel’s share took off last week when it zoomed 16.1%, after announcing deals in Germany and Israel. It marked the stock’s best week since July 17, 2009, when shares rose 17.1% in that five-day period after the chipmaker reported a better-than-expected quarter and outlook, according to FactSet data. The stock has leaped 26.64% since the start of the year through June 23, despite slipping during the past week.

Morgan Stanley analyst Joseph Moore recently raised his price target on Intel to $38, up from $31, while keeping an equal weight rating on the shares.

Chart courtesy of www.stockcharts.com

“The bears are on the run,” Skousen quipped to his Forecasts & Strategies subscribers. As they say on Wall Street, “Bull markets climb a wall of worry,” wrote Skousen, quoting his own “Maxims of Wall Street,” book (www.skousenbooks.com).

“Monetarists like Steve Hanke and Timothy Congdon are predicting a severe recession in 2023-24 due to the Fed’s tight money policy,” Skousen opined. “The broad-based money supply (M3) is actually declining.”

Skousen, a proponent of the Gross Output (GO) indicator of economic growth that includes intermediate stages of production, said recent data show slowing growth in the United States and the global economy. First-quarter GO will be released during the coming week on Thursday, June 29.

A recession is quite possible, Skousen conceded, but the technology bull market is still intact, aided by “robust corporate earnings” and a gradual decline in price inflation, especially gasoline prices.

Jump into the AI Wave, Seasoned Stock Picker Says 

“When a tech wave like this is roaring into shore, it behooves investors to jump on it early,” said Jim Woods, who heads the Intelligence Report investment newsletter and the Bullseye Stock Trader advisory service that offers both stock and option recommendations.

Paul Dykewicz meets with Jim Woods, head of Bullseye Stock Trader.

Woods has amassed a track record of success in recommending profitable stock and option trades in artificial intelligence stocks. For example, he recently reaped rewards from the rapid rise of C3.ai Inc. (NYSE: AI) and Rambus, Inc. (NASDAQ: RMBS). He produced a 167.20% gain on AI July 21 $25 call options in just 31 days. Woods also achieved an 83.10% profit in RMBS Aug. 18 $50 call options in only 13 days. Both recommendations came in his High Velocity Options trading service. That service only recommends options aimed at producing quick profits.

Connell Chooses Oracle as One of Three Big Artificial Intelligence Stocks to Buy

Michelle Connell, who heads the Dallas-based Portia Capital Management, commented on a TDAmeritrade Network program aired Monday, June 12, about the recent rise of Oracle (NYSE: ORCL), a computer technology company headquartered in Austin, Texas. Connell commented about the company’s latest earnings report when it beat projections.

The AI “performance train” continues and Oracle wants to be the “Netflix of AI,” Connell opined. Intel’s stock is now up 48.40% year-to-date and 20.40% in the last month

Chart courtesy of www.stockcharts.com

“Two-thirds of Oracle’s revenues come from their cloud infrastructure products,” Connell commented. “Companies that use AI or make AI software review millions of pieces of data. Having the ability to store that data in the cloud is critical and companies are bulking up on their capacity. Oracle is thought to have the most economic cloud infrastructure platform for AI.”

Michelle Connell heads Portia Capital Management.

Since the stock reported results on June 12, several Wall Street analysts increased their estimates and price targets. However, the new average price target is $120 per share while the stock is only slightly below that level. Thus, it seems overvalued — especially over the next several months, Connell counseled.

The stock is getting pretty expensive here, Connell cautioned. Its current price-to-earnings (P/E) ratio is about 41, even though its average P/E is 26, she added.

“But now, it’s a case of what we do not know,” Connell said. “And what we do not know is ORCL’s potential in the AI arena. It could be huge.”

The stock looks compelling from a long-term view, Connell continued. Its estimated revenue for 2026 is in the $65 billion range. That’s a 50% increase from the 42 million it produced in 2022, Connell added.

Investors should consider buying Intel shares on pullbacks, Connell counseled.

“When the Federal Reserve stops ratcheting up interest rates, I would expect strong growth stories to continue to profit,” said Connell. “On the other hand, forecasts that the Fed may raise rates further later this year warrant caution for technology investors, if those increases occur.”

Russia’s Relentless Ruin of Ukrainian Residential Areas Adds Political Risk for Investors

The United States recently warned that drinking water supplies could be harmed for more than 700,000 people after the destruction of the Kakhovka dam in southern Ukraine as the latest catastrophe that has accompanied Russia’s continuing attacks. Russia has aimed missile and drone attacks at residential areas throughout Ukraine, in addition to battling Ukraine’s military members who have been called upon by President Volodymyr Zelensky to defend their nation from the invaders.

Russia reportedly has moved tactical nuclear weapons to neighboring Belarus as a potential launch site against Ukraine, which is  starting to pursue a counteroffensive to push the attackers back to their own country. However, President Zelensky has acknowledged gains on the battlefield have proven to be “slower than desired.”

With Russia’s invasion of Ukraine heightening political risk for businesses in the affected nations, as well as countries that export and import with them, the ongoing conflict adds uncertainty for investors. As a result, investors may opt to choose the increased stability of the four income-paying large artificial intelligence stocks to buy that offer the potential to profit from dividends and share price appreciation.

Paul Dykewicz, www.pauldykewicz.com, is an award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal omf Commerce, Crain Communications, Seeking Alpha, Guru Focus and other publications and websites. Paul can be followed on Twitter @PaulDykewicz, and is the editor and a columnist at StockInvestor.com and DividendInvestor.com. He also serves as editorial director of Eagle Financial Publications in Washington, D.C. In that role, he edits monthly investment newsletters, time-sensitive trading alerts, free weekly e-letters and other reports. Previously, Paul served as business editor and a columnist at Baltimore’s Daily Record newspaper and as a reporter at the Baltimore Business Journal. Plus, Paul is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The uplifting book is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many other sports figures. To buy signed and specially dedicated copies, call 202-677-4457.