The Best AI Stock to Own Could Be Sitting in Your Pocket - The Motley Fool

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The Best AI Stock to Own Could Be Sitting in Your Pocket - The Motley Fool

If you're hunting for artificial intelligence (AI) stocks to buy, you're not alone.
Excitement over AI has surged since OpenAI launched ChatGPT late last year, and it's not just investors who see an opportunity in the new technology. Companies are talking up their AI initiatives more than ever before, a sign that the boom is more than just hype.
Meanwhile, shares of Nvidia (NVDA 3.62%), the semiconductor champ, skyrocketed after management gave much better guidance than expected for the second quarter. This indicates that demand for its AI chips is surging as businesses large and small are looking to leverage new generative AI technologies.
However, many of the well-known AI stocks have already seen their valuations spike as investors have piled into them, even as most have barely shown positive results from the AI boom.
Nvidia, for example, now trades at a price-to-earnings ratio of around 200 and has a market cap of $1 trillion. C3.ai, another AI stock that soared this year, has a price-to-sales ratio of 15, even though revenue growth was flat.
If you're looking for a reasonably priced AI stock that could be a big winner, the answer could be more obvious than you think. Image source: Getty Images. The consumer tech king
Unlike its big tech peers -- including Microsoft, Alphabet, Amazon, and Meta Platforms -- Apple  (AAPL 2.31%) has spent little time talking up its ambitions in artificial intelligence, and its management has generally avoided using the buzzy phrase on earnings calls and other presentations.
However, Apple could be one of the biggest winners from the AI boom since it has a suite of devices ready to serve as vehicles for the new technology. In other words, unlike many companies trying to leverage the power of AI, Apple has a business model already built in to capitalize on it: selling devices and the services that go with them. 
And right now, there's no device more capable of capitalizing on the AI boom than the Vision Pro, the mixed reality headset that Apple unveiled at its Worldwide Developers Conference in early June and that retails for $3,500.
The Vision Pro uses machine learning to do things like render a full image of your face so you can use FaceTime even though you wear the device over your eyes and it has no full frontal cameras. To do so, the Vision Pro uses its front sensors and a neural network to create what Apple calls "your digital persona." AI is also what allows the Vision Pro to function without using the kind of handheld haptics that the Meta Quest requires, one example of how the Vision Pro is pushing the limits of technology, including AI. 
That also forms the backbone of other tools like predictive text, Siri, and new applications, including Journal, which can personalize suggestions taken from your iPhone to help you write. Why Apple is the easiest AI stock to own
It's unclear if the Vision Pro will be a success, and the new device doesn't go on sale until early next year. But its introduction puts Apple on the pole position to control the next computing platform, meaning it's also the company most likely to own the device that serves as the vehicle for AI. 
If the technology is as powerful as AI bulls believe it will be, Apple's consumer-tech ecosystem will grow even stronger.
Apple has tons of brand equity in consumer hardware, competitive advantages through its installed base of 2 billion complementary devices, and now the device that could be the next generation of tech hardware.
If you're putting together an AI stock portfolio, Apple is a no-brainer. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool's board of directors. John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jeremy Bowman has positions in Amazon.com and Meta Platforms. The Motley Fool has positions in and recommends Alphabet, Amazon.com, Apple, Meta Platforms, Microsoft, and Nvidia. The Motley Fool recommends C3.ai. The Motley Fool has a disclosure policy.

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