Artificial Intelligence (AI) is one of the most promising industries and so wanting to get your punts in on the best AI stocks in India is a given.

AI mirrors human cognitive abilities through te incorporation of AI technologies such as Machine Learning (ML), Natural Language Processing (NLP), and Computer Vision.

This has resulted in the development of intelligent systems that can analyze vast datasets, automate mundane tasks, and make informed decisions.

With India being the fastest-growing economy with a massive population and a leader in global tech, it will also be at the forefront of the AI revolution.

In this article, we will delve into the best AI stocks in India to invest in.

Best AI stocks in India to invest in: What Is AI?

AI mimics the human intelligence of decision-making and problem-solving in computers and machines. Nowadays it is prevalent in cloud-based, consumer applications, enterprise applications and even immersed firmware. John McCarthy, one of the founding fathers of AI defines it as ‘the science and engineering of making intelligent machines.’

AI is a cutting-edge technology that has become more important in various sectors. In India, the importance of AI has grown and with investors’ attention, it has also been reflected in the stock market. 

Best AI stocks in India to invest in: How To Invest In AI

AI is a fast-growing disruptor technology to invest in. There are many ways in which you can invest in AI and profits can be obtained by recognizing these disruptor trends and investing in companies. Due to higher competition building among the AI companies identifying which company will end up the winner can be a task. 

Some investors will directly invest in companies that develop AI, while others will choose to invest in the companies that benefit from AI’s wider adoption. With the belief that AI might displace workers in many sectors, there is an opportunity to identify companies, such as the ones focused on worker retraining, that may take advantage of these large shifts in human resources.

Best AI stocks in India to invest in: What is Artificial Intelligence (AI)?

AI refers to the ability of machines to perform tasks that typically require human intelligence, such as speech recognition, decision-making, and experiential learning.

Using AI, businesses can examine enormous amounts of data to identify trends and insights that might otherwise be overlooked by human analysis.

The pervasive influence of AI is reshaping how businesses operate and the services they offer.

Through innovations like chatbots and self-driving vehicles, AI is enhancing the convenience and effectiveness of our lives.

Therefore, investing in the top artificial intelligence stocks in India presents promising growth prospects.

Top AI Stocks in India

Let’s take a closer look at the leading AI stocks in India, ranked by their Market Capitalization:

#1 Bosch Ltd – Best AI Stocks in India

Bosch Ltd, though not the first name that comes to mind when discussing AI, has strategically positioned itself to benefit from this technology. As a prominent electronics and white-goods manufacturer, Bosch has leveraged AI to develop innovative solutions for its range of products and services.

Since 2017, Bosch has been actively incorporating AI in various aspects, including engineering, production, supply chain management, and electric vehicles. The company’s ambitious goal is to produce all its goods using AI or integrating AI by 2025.

#2 Tata Elxsi – Among the Best AI based Stocks in India

Based in Bengaluru, Tata Elxsi has been a major player in the AI domain for the past 25 years. The company has earned its position as one of the top AI stocks in India by creating unique solutions and systems for various applications, ranging from video analytics to self-driving cars.

Among its remarkable offerings is the ‘Cognitive Video Services Framework,’ empowering new revenue models, personalized content, automated content analysis, and more.

Additionally, Tata Elxsi is actively engaged in IoT-enabled products and services, as well as exploring the potential of the Metaverse.

Tata Elxsi also offers solutions like video summaries, scene and actor recognition, automatic subtitle generation, filtering objectionable content, and content metrics for Ad Analytics for OTT platforms.

#3 Persistent Systems Limited

Persistent Systems is a valuable resource for companies seeking software engineering and strategy services to modernize their businesses. It has its own software and frameworks with pre-built integration and acceleration.

As a strategic partner, the company specializes in secure Generative AI solutions and collaborates with major tech giants like AWS, Microsoft, and Google. With a platform-agnostic suite of Generative AI solutions, Persistent Systems facilitates the safe adoption of Generative AI for enterprises, ensuring data security and intellectual property protection.

#4 Oracle Financial Services Software

Oracle Financial Services Software is also among the top AI based stocks in India. It offers IT solutions and business processing services to the financial sector.

The company has embraced cutting-edge technologies such as blockchain, artificial intelligence, and machine learning to empower financial institutions to become more responsive, agile, collaborative, and insightful.

By leveraging these advancements, Oracle Financial Services Software aims to drive innovation in the financial services industry.

#5 Cyient Limited

Cyient operates primarily as an outsourcing company, focusing on engineering, industrial products, data and network operations, and product realization.

It has made significant investments in Digital Engineering, with particular emphasis on AI, ML, and cloud computing.

Cyient’s products, such as CyFAST, an AI-powered test automation platform, have witnessed success by covering a vast number of test cases and reducing time-to-market.

Another product is CyARC which helps regulatory experts by bringing a 40% reduction in time and cost through AI technology.

The company’s dedication to innovation is evident in its continuous development of groundbreaking AI solutions.

#6 Happiest Minds Technologies

Incorporated in 2011, Happiest Minds Technologies claims to be a next-generation IT solutions & services company. The company offers IPs and domain expertise across Digital Transformation & Enterprise Solutions, Product Engineering, Infrastructure Management, Security, Testing, and Consulting.

Happiest Minds’ analytics/AI offerings include implementation of advanced analytics using artificial intelligence, machine learning and statistical models, engineering big data platforms to deal with large volumes of data, creating actionable insights with data warehousing, modernization of data infrastructure and process automation through AI.

It also offers solutions such as Video Analytics, Audio Classification, Damage Detection, Video Highlights Generation. In FY 2022-23, its revenues from analytics/AI stood at 12.2% which makes it one of the best AI stocks in India.

#7 Affle India

Incorporated in 1994, Affle is a global technology company with a proprietary consumer intelligence platform that transforms ads into recommendations, empowering marketers to effectively identify, engage, acquire, and drive transactions with potential and existing users.

Utilizing AI and ML, Affle drives user conversions across connected devices and excels in audience segmentation and predictive modeling for identifying relevant users in fintech and online transactions.

#8 Zensar Technologies

Zensar Technologies entered the artificial intelligence field in August 2019. The company has developed deep learning-based solutions for industries such as BFSI, retail, and manufacturing.

Zensar leverages AI in data engineering, analytics, and demand forecasting for products based on historical sales and real-world data.

Additionally, Zensar has created a groundbreaking solution that combines AI with Geographic Information Systems (GIS) to identify potential excavation hazards, thereby preventing accidents.

The business is making investments in blockchain, IoT (Internet of Things), new and exponential technology (NeXT), and natural language processing. The company’s R&D section, Zensar AIRLabs, has applied for 100 patents in the previous two years.

#9 Saksoft

Saksoft Ltd specializes in providing business intelligence and information management solutions primarily to mid-tier companies.

As a leading Digital Transformation Solution Partner, the company offers a range of services, including application development, testing, quality control, cloud-based solutions, mobility, Internet of Things (IoT), Information Management (IM), and Business Intelligence (BI). Saksoft’s expertise in these areas positions it as a significant player in the AI landscape.

#10 Kellton Tech Solutions

Kellton Tech Solutions excels in digital transformation, ERP, and other IT services, catering to clients’ digital needs through different platforms.

The company’s diverse services cover agile software development, digital commerce & marketing, digital integration, outsourced product development, platform modernization, professional services, technology consulting, testing & automation, among others.

nvest In AI ETFs

An exchange-traded fund is a pooled investment security that acts much like a mutual fund.

ETFs can be purchased and sold on a stock exchange just like any regular stock can.

ETFs primarily consist of funds with high holdings in companies that support the growth of AI technology. Let us see a few best AI ETFs to invest in.

Mirae Asset AI ETF 

Mirae Asset Global X Artificial Intelligence & Technology ETF FoF Direct Growth is an Indian AI ETF that is an open-ended fund of fund scheme which invests in units of Global X Artificial Intelligence and Technology ETF.

The objective behind this scheme is to provide long-term capital appreciation from portfolio investing in units of Global X Artificial Intelligence and Technology ETF. AIQ Indexx has given up to 20.4% returns in the last seven years.

Robo Global Artificial Intelligence ETF (THNQ)

Robo Global Artificial Intelligence ETF gained 30.7% this year. This particular fund holds a global box of AI-related stocks whose portfolio is currently weighing between 0.5% to 2.7%.

This ETF is mandated to buy stocks of companies that are developing infrastructure and technology enabling AI like data and cloud services and computing, along with companies that apply AI in various sectors from business, e-commerce and healthcare among others. 

Global X Artificial Intelligence and Technology ETF (AIQ)

The Global X Artificial Intelligence and Technology ETF has a return of 31.8%. It is another ETF that holds a global box of stocks across industries.

AIQ tracks an index that is a modified version of market cap-weighted that caps its constituents at 3%. This ETF seeks to provide investment results that are in tune with the price and yield performance. 

Global X Robotics and Artificial Intelligence ETF (BOTZ)

Global X Robotics and Artificial Intelligence ETF are among the top performers which is so far up by 35.4% this year. Its thematic index tracks companies that are involved in non-industrial robots, industrial robotics and automation, artificial intelligence and unmanned vehicles.   

iShares Robotics and Artificial Intelligence ETF (IRBO)

iShares Robotics and Artificial Intelligence ETF is a global fund following companies from both emerging and developed markets that are involved in artificial intelligence and robotics. 

The fund’s primary index uses company filings and public disclosures to recognize eligible stocks. To select a company must either obtain 50% of the revenue or have a 20% of market share. The index is rebalanced half yearly and reconstituted annually. 

Invest In Companies Leading In AI

There are many large companies interested in and investing in AI. Some of these companies are Google, Microsoft and Amazon. These companies are not just at the forefront but also have the financial potential to keep developing it. 

Invest In Venture Capital Funds

Venture capital funds are collective investment funds that help investors who look for private equity stakes in high-growth opportunities in startups, firms in early stages and small-to-medium-sized companies with powerful growth potential, in this case, companies that are developing innovative AI technologies. These funds can help provide exposure to various aspects of the companies with strong growth potential.  

Venture capital funds like Lightspeed India, Sequoia Capital India and Matrix Partners India are progressively developing early-stage capital in the AI sector. According to PitchBook data, some of the most promising and active venture capital investors in generative AI are Sequoia, Andreessen Horowitz, Soma Capital, Khosla Ventures and Tiger global management. 

Best AI stocks in India to invest in: Invest In Smaller Companies With Innovative AI Solutions

Many small companies are developing advanced AI technologies. These are the companies that have high growth potential along with risk. Investors should research and analyze the company’s finance, management team and AI industry trends before investing.

A few small-cap AI companies that you can keep an eye on are:

Innodata (NASDAQ: INOD) – Innodata is a technological company that provides all-inclusive data processing and management solutions. It has a market capitalization of around INR 29 billion.

BigBear.ai.Holdings (NYSE: BBAI) – BigBear.ai. delivers AI and machine learning solutions for decision support. The company manages two segments i.e. Cyber and Engineering and Analytics. It also offers high-end services in technology and consulting. The market capitalization is around INR 25 billion.

SoundHound AI (NASDAQ: SOUN) – SoundHound AI specializes in AI solutions for mobile applications and voice-enabled devices. Its popular application, SoundHound and voice recognition is downloaded over 315 million times globally. The market capitalization is around INR 41 billion. 

Best AI stocks in India to invest in: How To Search For AI Investment

It can be a task for an individual investor to search for the best AI stocks in India to invest in.

For starters, the investor should read and understand the AI industry and its various aspects as there are multiple ways in which one can invest in this area. 

Understand what market exposure excites you the most and analyze all the investment opportunities that the AI universe has to offer.

Once you set your mind on a particular investment plan, utilize fundamental and technical investment analysis before investing.

There are two types of AI courses available for you to get a deeper understanding of the AI universe, University or college AI courses and online or offline training AI courses.

Some of the career options are machine learning engineer, software engineer, robotics scientist, data scientist and game programmer.

Learn more about the AI courses and how they work. 

Forecast

The best way to analyze a company’s growth is to check the earnings of the company. When you invest in AI stock, you will look to consistently grow your earnings.

These companies are considered growth stocks, forecasting your earnings is an important factor as it also can move the stocks sharply. 

Yearly Report

The yearly financial report of a company provides record information and insights into the various financial activities like debt to equity or other financial ratios that play an important role in deciding whether to invest in the stocks or not. 

Relative Performance vs. Market

Relative performance is how an individual stock performs in terms of another stock or relative to an index. With constantly newer AI companies, investors should look at the relative performance between companies.

Growth Analysis

An investor should be able to analyze the growth, earnings, and market shares along with other metrics of the company that can help you to understand the strength of the company. 

Projection

As a new investor, analysis projections and research reports can be more helpful. The market volatility with new technological developments and swift change in the company’s prospects than with stocks in much more mature industries.

It will be of great use to get professional researchers that have understanding of AI investment along with individual stock prospects relative to the competitors in the industry.  

Risks of Investing In AI: Best AI stocks in India to invest in

When you invest in AI stocks, there are always risks involved, let us have a look at a few of them below. 

• AI markets can be volatile as an emerging technology and be subjected to rapid changes in the investor’s point of view that make AI investment riskier than other established sectors. 
• There is limited regulation in the AI sector which makes it very difficult to forecast the developments and risks related to investments. 
• Due to AI’s competitive companies, the market’s share and profit can be swiftly changed. 
• With AI technology ethical concerns can be raised related to bias, job displacement and privacy that could disrupt growth and profitability. The use of ChatGPT raises ethical and legal issues whereas Claude 2 claims to be an ethically-driven company that makes generative AI secure and steerable according to their website.
• AI technologies are still in their developing stage, so there’s a chance that some of them will not live up to the expectations or worse face unpredicted limitations. 

Conclusion

FAQs: Best AI stocks in India to invest in

What is Artificial Intelligence (AI) and how is it reshaping industries?

AI can perform tasks that typically require human intelligence, such as speech recognition and decision-making. Additionally, the technology enhances convenience and effectiveness through innovations like chatbots and self-driving vehicles.

Which are the Best AI stocks in India to invest in?

Best AI based stocks in India include Bosch Ltd, Tata Elxsi, Persistent Systems Limited, Oracle Financial Services Software Ltd, and Cyient Limited.