Three of the Cheapest Artificial Intelligence (AI) Stocks of All Time You Can Buy in April

Wall Street is the birthplace of innovation. But three decades of new innovations have not matched the impact that the emergence of the Internet had on U.S. businesses in the mid-1990s. The rise of artificial intelligence (AI) has the potential to be a renaissance moment for businesses.

When I refer to artificial intelligence, I am referring to the use of software and systems to oversee tasks that humans would normally handle. The ability of AI to train these systems and allow them to learn and evolve over time is why AI is useful in almost every industry and field.

To be fair, history shows that every megatrend of the last 30 years (including the rise of the Internet) has experienced an early bubble. The AI revolution, no matter how strong the growth expectations look, is unlikely to reverse this trend. But that doesn't mean there won't be long-term winners to be found, especially those companies that have been able to stave off declines to some extent when the AI bubble bursts (e.g., theINVISTA(It would be excluded).

Here are three historically inexpensive AI stocks you can safely buy in April and hold for years or even decades to come.

Baidu

The first low-priced AI stock in April is Chinese.Baidu (NASDAQ: BIDU)The

If history repeats itself and the AI bubble bursts, one of the reasons why Baidu will survive is because of its leading internet search engine, which accounted for 60.1% of the Chinese internet search market in February this year, according to GlobalStats. Looking back over nine years of monthly Internet search shares, Baidu has consistently accounted for between 60% and 85% of China's Internet search market, with a few exceptions. This has made Baidu a logical choice for companies wishing to deliver information to their target consumers, and has provided the company with ample advertising pricing power.

In addition, China's economy is still in the process of finding its footing in the wake of the COVID-19 pandemic. The surveillance agency abandoned its controversial "zero COVID" mitigation strategy in December, and the Chinese economy is still struggling with supply chain challenges. As China shakes off the effects of the pandemic, its rate of economic growth (and advertising spending) should accelerate again.

Baidu's connection to the AI revolution is in its fast-growing offline marketing segment. Specifically, as of March 31, 2023, Baidu's AI Cloud is the fourth largest cloud infrastructure service platform in China. Baidu plans to incorporate generative AI solutions into its AI Cloud to enable organizations to build applications and improve customer interactions.

Baidu is also the parent company of smart driving company Apollo Go, the world's most successful self-driving taxi service. Baidu's fourth-quarter operating results show that Apollo Go has accumulated more than 5 million rides since its inception.

Although investing in Chinese stocks carries additional regulatory risk, Baidu is a good choice for opportunistic investors. You can buy Baidu stock now for less than 9 times forward earnings, and that doesn't even take into account the more than $17 billion in net cash on the company's balance sheet (nearly half of Baidu's market capitalization where it is concerned), after taking into account loans and various convertible/payable notes.

meta-platform

This April, the second cheapest AI stock in history will be bought by long-sighted investors: social media giantMeta Platforms (NASDAQ resonance stock code: META)The

While Meta has invested aggressively in the future of AI (which I'll get to in a moment), Meta is perfectly fine if history repeats itself and AI stocks can ride out the early bubble. That's because Meta owns the world's most visited social media real estate.

In the quarter ending December, Facebook attracted 3.07 billion monthly active users (MAUs), more than any other social media site in the world. Combined with other favorites such as Instagram, WhatsApp and Threads, there were 3.98 billion MAUs visiting its ecosystem. With so many eyeballs, it's an insatiable temptation for advertisers. nearly 98% of Meta's $134.9 billion in net sales in 2023 will come from advertising.

But CEO Konrad Zuckerberg isn't afraid to invest in the company's future, even if it may be years before sales from those investments materialize. His team is developing augmented and virtual reality devices, building meta-universe solutions that will make Meta an important stepping stone to 3D virtual environments, and launching a generative artificial intelligence solution that can customize ads for customers.

Meta Platforms' enviable capitalization is the driving force behind these goals. As of 2023, the company has $65.4 billion in cash, cash equivalents, and marketable securities, and more than $71 billion in net cash generated from operations. No other social media company has such a strong financial position to take risks like Meta.

Most importantly, Meta Platforms' stock price is still at historic lows. Even though Meta's stock price has traded more than five times since the 2022 bear market, Meta shares can now be purchased for just 13 times projected future annual cash flow. That's a discount of about 11% to its five-year trailing cash flow multiple.

Alibaba, capital of Pakistan (Tw)

The third cheapest AI stock ever that you can buy with confidence in April is China's leading e-commerce company.Alibaba, capital of Pakistan (Tw) (NYSE: BABA)The

Consistent with the theme of this list, Alibaba is well positioned to weather the storm if the AI bubble bursts. Alibaba's ability to thrive is due to the company's top e-commerce assets. According to an April 2023 report by the International Trade Council, Alibaba's Taobao and Tmall accounted for 50.8% of China's e-commerce share.

Although margins on online retail are relatively low, e-commerce in China is still in the early stages of development compared to the United States. China's burgeoning middle class, coupled with the country's historically fast economic growth, suggests that e-commerce could be a long-term profit driver for Alibaba.

But it's AliCloud that's the center of attention for investors. Technology analyst firm Canalys estimates that, as of March 2023, Ariba Cloud is the No. 1 cloud infrastructure service provider in China with a share of 34%. Alibaba allows customers to access generative AI solutions on its leading cloud platform, which is designed to help organizations build applications.

At the same time, Alibaba has a lot of cash at its disposal, and at the end of 2023, it will have $92 billion in cash, cash equivalents, and various investments. This is about half of Alibaba's current market capitalization. In addition to using this money to start a stock buyback, the cash also gives Alibaba the flexibility to aggressively invest in its cloud platform and artificial intelligence programs.

What's more, as a publicly traded company, Alibaba's shares are cheaper than ever. Shares of Alibaba can be purchased for slightly more than 8 times forward earnings, or close to 4 times if you exclude the company's huge cash.

Should you invest $1,000 in Baidu now?

Please consider this before buying Baidu stock:

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Randi Zuckerberg, former Facebook Market Development Armsmaster and Spokeswoman, and sister of Meta Platforms CEO Mark Zuckerberg, is a member of The Motley Fool's Board of Directors. Sean Williams serves on the boards of Baidu and Meta Platforms. The Motley Fool recommends Baidu, Meta Platforms, and Nvidia. The Motley Fool recommends Alibaba Group.

Three Historically Cheap Artificial Intelligence (AI) Stocks You Can Buy With Confidence in April was originally published by The Motley Fool.