2 Artificial Intelligence Stocks to Buy in May

The AI industry is staring down an uncertain and volatile macroeconomic environment, as well as some signals that demand for AI infrastructure may be starting to cool. AI server manufacturer Super Micro Computer slashed its guidance earlier this week as customers delayed purchasing decisions, and some tech giants reportedly have been pulling back on data center expansion.

But investors remain keen on investing in artificial intelligence (AI). What are the best AI stocks to buy in May? Personally, I'd steer clear of AI hardware companies like Super Micro and Nvidia, as well as hyperscalers like that are pouring incredible amounts of capital into AI data centers to power the latest compute-hungry AI models. Instead, I'd focus on companies that are betting on AI inference and small, efficient, specialized AI models and agents. My top two picks this month are International Business Machines (NYSE: IBM) and Cloudflare (NYSE: NET).

There are multiple components to IBM's AI strategy, and all of them focus on real-world use cases for enterprise clients. The company has booked $6 billion in generative-AI-related business so far, adding $1 billion to that total in the first quarter, and much of that comes from the consulting business. While clients are being cautious with discretionary spending, generative AI projects are still getting the green light.

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Source Fool.com