What AI stocks are and how to buy them
An AI stock is a share of ownership in a company that develops, uses, or sells artificial intelligence technology. You buy AI stocks the same way you buy any other stock: through a brokerage account, by placing an order for a specific number of shares at the market price. The difference is that instead of owning a piece of a retailer or manufacturer, you own a piece of a company whose business depends on AI — whether that's Nvidia (which makes the chips that power AI systems), OpenAI's parent company, or a traditional company like Microsoft that has invested heavily in AI products.
You do not need to understand how the AI technology works to own the stock. You only need a brokerage account, money to invest, and the ticker symbol of the company you want to buy. The actual purchase takes minutes once your account is open and funded.
Key Takeaways
- AI stocks are shares in companies that develop or use artificial intelligence, and you buy them through any standard brokerage account.
- You can buy individual AI company stocks or invest in an AI-focused fund or exchange-traded fund (ETF) that holds multiple AI companies at once.
- Chip makers like Nvidia, cloud providers like Amazon and Microsoft, and software companies are the main categories of AI stocks available to individual investors.
- Stock prices move based on company earnings, competition, and investor sentiment — not on whether you personally understand the technology.
- Starting with a small amount and spreading your money across multiple stocks or a fund reduces the risk of losing everything if one company struggles.
Opening a brokerage account
Before you can buy any stock, you need a brokerage account. This is an account held at a company that buys and sells stocks on your behalf. Common brokerages include Fidelity, Charles Schwab, E-Trade, Robinhood, and Webull. Each one has a website and a mobile app where you can open an account in 10 to 20 minutes.
The process is straightforward: you provide your name, address, Social Security number, and employment information. The brokerage verifies your identity and then asks you to link a bank account so you can transfer money in. Once your bank account is linked and your deposit clears (usually one to three business days), your cash sits in the brokerage account and is ready to invest.
You do not pay a fee to open the account. Most brokerages make money from other sources and do not charge commissions on stock trades anymore. Some brokerages offer cash bonuses if you open an account and deposit a certain amount, though the terms vary.
Choosing between individual stocks and AI funds
You have two main paths: buy shares of individual AI companies, or buy shares of a fund that holds many AI companies at once. Each approach has a different feel and different risk.
Individual stocks mean you pick one or more companies — say, Nvidia and Microsoft — and own a piece of each. You control exactly what you own. The downside is that if you pick wrong, or if one company stumbles, your money can drop significantly. If you own only Nvidia and Nvidia's stock falls 30 percent, your investment falls 30 percent.
AI-focused funds and ETFs are baskets that hold 20, 50, or even 100 AI-related stocks at once. When you buy one share of an AI ETF, you own a tiny piece of all those companies. If one company struggles, the others may do well and balance it out. The trade-off is that you own pieces of companies you may not have chosen yourself, and you pay a small annual fee (usually 0.3 to 0.8 percent of your investment per year) to the fund company for managing it. Examples include the Invesco QQQ Trust (which holds many tech and AI companies) and the Global X Artificial Intelligence ETF.
Beginners often start with a fund because it spreads risk. More experienced investors often mix both — a fund for stability and a few individual stocks for companies they believe in.
Types of AI companies and their stock symbols
AI stocks fall into a few categories. Knowing the difference helps you understand what you are buying.
Chip makers design and sell the processors that run AI systems. Nvidia is the largest and most well-known; its ticker is NVDA. Advanced Micro Devices (AMD) and Intel (INTC) also make AI chips. These companies benefit when AI demand grows because every AI system needs chips.
Cloud providers rent computing power and AI tools to businesses. Amazon Web Services (part of Amazon, ticker AMZN), Microsoft Azure (part of Microsoft, ticker MSFT), and Google Cloud (part of Alphabet, ticker GOOGL) all offer AI services. When a company uses AI, it often rents the computing power from one of these providers rather than building its own.
Software and AI-native companies build AI products or use AI to power their services. This category is broader and includes companies like OpenAI (which does not have a publicly traded stock yet), as well as established software makers like Adobe (ADBE) and Salesforce (CRM) that have added AI features to their products.
You can research any company's ticker symbol by typing the company name and "stock ticker" into a search engine, or by searching within your brokerage's app.
Placing your first stock order
Once your brokerage account is funded, buying a stock takes four steps. Open your brokerage app or website, search for the company by name or ticker symbol, enter the number of shares you want to buy, and review the order before you submit it.
When you place an order during market hours (9:30 a.m. to 4 p.m. Eastern time on weekdays when the stock market is open), your order usually fills within seconds at or near the current price you see on screen. If you place an order after hours or before the market opens, it will wait until the market opens the next trading day and may fill at a different price.
You can also set a limit order, which tells your brokerage to buy only if the price drops to a certain level you choose. For example, if Nvidia is trading at $900 per share but you only want to pay $850, you can set a limit order for $850. If the price never drops that low, your order never fills. Limit orders give you control over price but no may provide the stock will be yours.
After your order fills, the shares appear in your account. You now own them and can hold them as long as you want, sell them whenever you choose, or add more shares later.
Understanding price movement and risk
Stock prices move every trading day based on company earnings reports, competition, news, and what other investors think the company is worth. An AI stock might jump 10 percent one day because the company announced a new product, or drop 8 percent the next day because a competitor released something similar. This movement is normal and does not mean you made a mistake.
The risk of owning stocks is that you can lose money. If you buy Nvidia at $900 per share and it falls to $700, your investment is worth less. You only lose that money if you sell at the lower price. If you hold and the price recovers to $900 or higher, you break even or gain. But there is no may provide it will recover.
This is why starting small and spreading your money across multiple stocks or a fund matters. If you invest $1,000 across five different AI stocks instead of putting all $1,000 into one, a big drop in one stock hurts less. Over time, as you learn and feel more confident, you can invest more.
Taxes and long-term holding
When you sell a stock for more than you paid, you owe taxes on the profit. The tax rate depends on how long you held the stock. If you held it for less than one year, the profit is taxed as short-term capital gains at your regular income tax rate. If you held it for one year or longer, it is taxed as long-term capital gains at a lower rate (0, 15, or 20 percent depending on your income).
This is one reason many investors hold stocks for at least a year before selling. You pay less tax on the profit. Your brokerage will send you a tax form (Form 1099) at the end of the year showing all your gains and losses, which you report when you file your taxes.
If you hold a stock and it loses value, you can sell it and use the loss to offset other gains, which can lower your tax bill. This is called tax-loss harvesting and is a strategy some investors use, though it is not necessary to get your free guide.
Frequently Asked Questions
Do I need a lot of money to start buying AI stocks?
No. Most brokerages let you open an account and buy stocks with as little as $1 to $100. Some stocks cost more per share than others — Nvidia might be $900 per share while another company might be $50 — but you can buy fractional shares (a piece of one share) at most brokerages, so price does not stop you from investing.
What is the difference between a stock and an ETF?
A stock is ownership in one company. An ETF is a fund that holds many stocks at once. When you buy an ETF share, you own a tiny piece of all the companies in that fund. ETFs spread risk because if one company struggles, others may do well. Stocks give you more control but more risk if you pick wrong.
Can I lose more money than I invested?
No. If you buy a stock and the company goes bankrupt, the stock becomes worthless and you lose your entire investment, but you cannot lose more than you put in. You are not borrowing money or taking on debt unless you use a feature called margin, which beginners should avoid.
How do I know which AI stocks to buy?
Start by reading the company's website and recent news articles about what they do. Look at their earnings reports and how their stock has performed over the past year. Many brokerages also offer research tools and analyst ratings. If you are unsure, a broad AI fund removes the guesswork by holding many companies at once.
Should I buy AI stocks if I do not understand the technology?
Yes. You do not need to understand how AI works to own the stock. You only need to understand that the company makes or uses AI, that people are buying its products, and that the business is making money or is expected to make money soon. If you cannot understand the business model in straightforward terms, that is a sign to skip that stock or learn more before buying.