Since the launch of OpenAI's famous chatbot, ChatGPT, the artificial intelligence (AI) revolution has taken the investment world by storm. While the initial euphoria seems to have died down somewhat, the power of this investment trend is far from over.

A few prominent AI stocks seem to be witnessing a pullback on investor concerns about the monetization potential of their AI capabilities and ongoing investments in AI infrastructure. However, considering the companies' robust fundamentals and healthy financials, this dip can prove to be an attractive entry point for astute investors. Here's why these three AI stocks are smart picks after the current dip.

The first AI stock that could be a smart pick on a dip is technology giant Microsoft (NASDAQ: MSFT). Although the company beat revenue and earnings estimates in the fourth quarter of its fiscal 2024 (ended June 30), the stock is currently down by almost 5.7% since it released its earnings results on July 30. Investors seem worried about several risks including the company's capacity constraints for AI services, which are impacting Azure's growth in the short run; heavy investments in building AI infrastructure; some softness in European markets; and increasing competition.

Continue reading

Source Fool.com