AI 2.0 and how to invest in it
Artificial intelligence (AI) took the investing world by storm in 2024, but its next evolution is set to create a new window of wealth creation.
Entrepreneur and futurist James Altucher calls this next phase “AI 2.0.” While not a formally defined term, AI 2.0 refers to the emerging world of artificial superintelligence, where autonomous systems can “solve problems we can’t even imagine yet,” said Altucher.
Altucher pointed to Elon Musk’s new supercomputer project called “Colossus” as an example of where AI is headed next. Musk has referred to Colossus as the “most powerful AI training cluster in the world,” and it’s set to double in the span of months.
Its purpose is to train and run xAI’s chatbot, Grok, and drive AI research around machine learning, neural networks, and simulations.
When describing Colossus, Altucher said, “Think of Nvidia’s chips as the neurons of a brain, and this company’s technology as the connective tissue that allows them to work together seamlessly.”
“This isn’t merely the next step in AI—it’s a leap forward that will define the next generation of scientific and societal breakthroughs,” he said.
Portfolio managers have been closely monitoring this trend. Raymond James Investment Management strategist Matt Orton says AI 2.0 extends beyond Big Tech to include other companies using artificial intelligence to improve their business.
For Orton, there’s a huge investment opportunity in this so-called “AI 2.0 bucket.”
“You look at electric equipment companies. We know we need more power in this country. We also know we need to cool data centers down as you continue to get more of them. So companies that are producing cooling solutions and liquid cooling, those names look very attractive,” Orton said.
The best AI 2.0 stocks to buy today
The best AI 2.0 stocks include familiar names in the artificial intelligence world as well as emerging players in machine learning, robotics, and drug discovery.
| AI 2.0 stock picks | Stock price |
| Nvidia (NVDA) | $137.71 |
| Amazon (AMZN) | $225.94 |
| Tesla (TSLA) | $426.50 |
| Recursion Pharmaceuticals (RXRX) | $6.53 |
| Snowflake (SNOW) | $170.79 |
| Ambarella (AMBA) | $80.79 |
| Oracle (ORCL) | $161.03 |
| Rockwell Automation (ROK) | $286.60 |
Nvidia (NVDA)
Advancements in AI and AI 2.0 wouldn’t be possible without powerful GPUs and software packages. For this reason, Nvidia remains a powerful player in the AI revolution.
With a market cap of nearly $3.4 trillion and a stock price of around $137, NVDA may seem like it’s out of reach for most investors. However, analysts are confident that the chipmaker will grow manyfold in the coming years and decades.
According to Markets and Markets, the global AI industry is expected to reach more than $1.3 trillion in the next five years as the global economy requires higher computational power and data availability. Nvidia will be instrumental in meeting that demand.
In the short term, analysts expect Nvidia’s revenues and earnings to continue to grow. Wall Street is calling for Nvidia’s adjusted earnings to rise by 50% over the next 12 months.
Amazon (AMZN)
While Amazon is known for being the world’s largest retailer, it’s heavily invested in AI across multiple facets of its business.
Amazon Web Services, the company’s leading cloud platform, has already developed AI models for important tasks like natural language processing, text-to-speech, and video analysis.
Meanwhile, the Amazon SageMaker is a platform that allows users to build and train machine learning models.
Some analysts have described Amazon as a “hyperscaler” of AI technology. As the company continues to develop cheaper alternatives to Nvidia GPUs—namely, Trainium and Inferentia—it could be poised to lead the next phase of AI adoption. This includes providing the infrastructure for advancements in AI 2.0.
Tesla (TSLA)
Tesla isn’t normally considered an AI company, let alone an AI 2.0 play, but CEO Elon Musk is forcing the world to view the electric vehicle maker through this lens.
Since early 2024, Musk has doubled down on the role of “autonomy” in pushing Tesla’s next growth phase. This includes greater emphasis on full self-driving cars and the long-awaited robotaxi rollout.
Tesla has also developed Dojo, a high-performance computing system used to train its AI models. Dojo’s goal is to process millions of terabytes of video data from Tesla’s cars to improve its full self-driving system.
While Musk’s xAI is more of a pure AI 2.0 play, it’s not a publicly traded company. Investors who are betting on Musk’s leadership in the AI race may find a suitable substitute in Tesla.
Recursion Pharmaceuticals (RXRX)
Unlike the Nvidias, Amazons, and Teslas of the world, Recursion Pharmaceuticals is a much smaller company innovating in AI drug discovery.
As a biotechnology company, Recursion generates massive amounts of biological data using automated lab experiments, such as cell imaging and data generation. The company uses AI to analyze cellular images to reveal meaningful insights that could lead to drug repurposing and discovery.
The company appears to be at the helm of AI-driven drug discovery, having even collaborated with pharmaceutical giant Bayer.
Recursion reported an improved cash position as of the third quarter of 2024, with total revenues more than doubling from one year earlier. RXRX is the only stock on the list that’s valued at less than $10.
Snowflake (SNOW)
As a cloud data platform, Snowflake is a lesser-known player in the artificial intelligence arena. However, Snowflake plays an integral role in the AI market by giving companies a platform for developing and launching their large language models and storing the vast amounts of data needed to create them.
2024 was a solid year for Snowflake, with product revenues hitting $900.3 million in the third quarter. The company has a whopping 754 Forbes Global 2000 customers. Because of this, the company upgraded its 2025 revenue forecast to $3.43 billion.
Analysts at Wedbush have taken notice, calling Snowflake one of the leading companies in the AI software sector.
SNOW stock rallied sharply in the final quarter of 2024, but it’s still trading below its all-time highs.
Ambarella (AMBA)
Ambarella is a semiconductor company that develops system-on-chips (SoCs) for various AI solutions, including computer vision, neural networks, and Edge AI processing.
Edge AI is considered one of the most important breakthroughs in artificial intelligence because it enables computations to happen directly on devices rather than relying on cloud services. Ambarella’s technology brings generative AI functions to devices and on-premise hardware, which can be used for various applications.
The company’s revenues increased by 63% in the third quarter, with total sales climbing 15% to $200.9 million in the nine months ending Oct. 31. AMBA’s net loss per share was also cut in half to $0.58 from $1.04 one year earlier.
AMBA stock has rallied more than 46% over the past year and is currently trading near all-time highs. However, the stock is still priced under $100 for a total market capitalization of around $3.4 billion.
Oracle (ORCL)
Not every AI 2.0 stock is considered speculative or high-risk. Oracle was founded in 1977 as a software development company and has blossomed into a legacy technology business. However, that doesn’t mean it stopped innovating.
Oracle has integrated AI into its cloud infrastructure, providing pre-built AI services like natural language processing and image detection. It also provides custom AI and machine learning models and Oracle AI apps.
Oracle’s technology provides businesses with various tools for boosting efficiency—think Enterprise Resource Planning, CRM, and Human Capital Management, to name a few.
Last year, the company embedded new generative AI features across its applications, improving tasks related to finance, marketing, supply chain management, and sales.
Oracle stock has a massive market cap of $450 billion. Its shares are up more than 50% over the last 12 months.
Rockwell Automation (ROK)
Rockwell Automation specializes in industrial automation, intelligent manufacturing, and robotics, with a focus on Internet of Things connectivity and factory design. It’s considered a strong AI 2.0 play because it uses machine learning models to optimize the manufacturing process.
Rockwell’s business suffered a setback in the fourth quarter, with revenues declining slightly more than expected.
Full-year revenue came in at $2.04 billion compared to the expected $2.07 billion. Adjusted-per-share earnings fell 32.1% to $2.47 for the year. Management attributed the decline to “softness in many of our end markets.”
The ROK share price is still 18% below its all-time high, which was last reached in late 2021. Despite the volatility, ROK could benefit from the AI upswing, especially following its partnership with Nvidia.
The two companies plan to “accelerate a next-generation industrial architecture” by making it easier for businesses to digitize their industrial needs.