VT 
Artificial intelligence is no longer a futuristic concept. It is actively reshaping industries, markets, and the investment landscape. As AI technologies like generative models, machine learning, and autonomous systems gain traction, more investors are searching for how to invest in artificial intelligence (AI). In this article, we explore how to invest in AI stocks, the opportunities, risks, strategies, and steps to get started.
Key Takeaways:
- AI stocks are shares of companies that develop or heavily use artificial intelligence, such as Nvidia, Palantir, Microsoft, and Alphabet.
- Learning how to trade or invest in AI stocks involves understanding the industry, building a trading plan, choosing a broker, and applying risk management.
- Investors can trade AI exposure through individual stocks, ETFs, or indices, depending on their risk profile and strategy.
- Common strategies include fundamental analysis, technical analysis, momentum trading, and news trading, each offering different ways to approach AI stocks.
- The tremendous growth of the AI sector brings both opportunities and risks, including high valuations, intense competition, regulatory challenges, and volatility.
What Are Artificial Intelligence (AI) Stocks?
AI stocks are shares of companies that are either directly building artificial intelligence technologies or making AI a core part of their business model. These can include firms that design AI software, provide cloud-based AI services, manufacture specialized chips and hardware needed for AI training, or companies in traditional industries like automotive and healthcare that are integrating AI to stay competitive. In short, AI stocks give investors exposure to businesses driving and benefiting from the rapid adoption of artificial intelligence.
Example: Nvidia is one of the most prominent AI stocks because its graphics processing units (GPUs) power the majority of AI applications worldwide. In fiscal 2024, Nvidia’s revenue surged 126 percent year over year to more than USD 60 billion, driven mainly by soaring demand for AI data center chips.
Discover what artificial intelligence trading is and how it works.
Why Choose AI Stocks to Trade or Invest?
AI is one of the most powerful investment themes of this decade, with an impact that stretches far beyond the technology sector. Choosing AI stocks gives investors a chance to take part in a growth story that is reshaping economies worldwide and transforming various sectors such as automation, robotics, virtual reality, and digital platforms. Below are the key reasons why AI stocks are an attractive choice for trading and investing.
Strong Growth Tailwinds
The global AI market was valued at about USD 279 billion in 2024 and is projected to grow at an annual rate of over 30 percent through 2033. Forecasts suggest the industry could expand to USD 2.4 trillion by 2032, and potentially USD 4.8 trillion by 2033, making it one of the fastest-growing sectors worldwide.
Innovation and Competitive Moats
AI companies often benefit from strong competitive advantages such as proprietary data sets, exclusive platforms, and high switching costs. Nvidia’s CUDA ecosystem is a clear example, as once developers build on it, moving away becomes difficult.
Diversification and Thematic Exposure
AI adoption extends well beyond technology firms. Healthcare providers use AI for diagnostics, financial institutions deploy it for fraud detection, and automakers integrate it into autonomous driving systems. This widespread adoption gives investors diversified exposure across the global economy when they choose AI stocks.
How to Trade or Invest in AI Stocks
With VT Markets, you can trade the AI shares through Contracts for Difference (CFDs), which let you speculate on price movements without holding the underlying stock. Below is a clear step-by-step guide on how to trade or invest in AI stocks.
Step 1: Understand How the AI Industry Works
Before trading, familiarise yourself with the AI ecosystem. This includes companies that design chips (such as Nvidia), build AI software platforms (such as Palantir), or integrate AI into broader services (such as Microsoft or Alphabet). Knowing how each business earns revenue and where it fits into the AI value chain will help you identify the most promising stocks.
Step 2: Develop a Trading Plan
Define your goals and strategy. Decide if you want short-term trades to capture volatility or longer-term positions to ride the growth trend. Your trading plan should define entry and exit rules, set your risk tolerance, and specify how much capital you are willing to commit to AI stocks.
Step 3: Choose a Reliable Broker
Select a regulated broker like VT Markets that provides access to global markets and offers AI-related instruments. VT Markets allows you to trade AI companies via CFDs, giving you the ability to go long (buy) or short (sell) depending on your outlook.
Step 4: Open and Fund Your Trading Account
Set up a trading account, complete verification, and deposit funds. Always start with an amount you are comfortable risking, as AI stocks can be highly volatile.
Step 5: Decide How You Want to Trade
Choose whether to focus on individual AI stocks, diversified ETFs, or indices with heavy AI exposure. This helps align your trading with your risk profile.
- Stocks: Trade single companies like Nvidia or Palantir. High potential returns, but also higher volatility.
- ETFs: Invest in a basket of AI-related companies. Lower risk than single stocks, with built-in diversification. Thematic ETFs offer convenient exposure to AI trends and emerging technologies without requiring you to pick individual stocks.
- Indices: Trade broad markets such as the Nasdaq 100 or S&P 500. Offers exposure to many AI-driven firms with less volatility.
Step 6: Decide to Go Long or Short
After deciding whether to trade individual stocks, ETFs, or indices, the next step is to choose your market direction. If you believe the price of an AI stock will rise, you can go long. If you expect a decline, you can go short. For example, many investors went long Nvidia during its 2023–2024 surge, while others shorted overvalued smaller AI firms during sharp pullbacks.
Step 7: Open Your First Trade
Once you have chosen the asset, direction, and trade size, it is time to place your order. Enter the details into your broker’s platform, including the amount you want to invest and any stop-loss or take-profit levels. With VT Markets, this process is straightforward. Select the AI stock or related instrument, confirm whether you are buying or selling, and execute the trade.
Step 8: Stay Informed and Updated
Follow earnings reports, new product launches, regulatory changes, and global AI market news. AI is a fast-moving industry, and staying updated will help you adjust your strategy and seize opportunities.
Discover the best AI stocks to buy in 2025.
Strategies to Trade AI Stocks
There are several investing and trading strategies that can help you approach AI stocks more effectively. Each method suits different styles of traders and investors, from long-term holders to short-term speculators.
Fundamental Analysis
Fundamental analysis focuses on a company’s financial health, including revenue from AI segments, R&D spending, gross margins, and strategic partnerships. For example, Palantir generated over USD 1.5 billion from government contracts in 2024, highlighting strong demand in defense and public sectors. Fundamental analysis helps investors assess whether an AI stock is undervalued or overpriced in relation to its long-term growth potential.
Technical Analysis
Technical analysis looks at price charts and indicators to spot trading opportunities. Traders often apply moving averages, RSI, and volume patterns when using technical analysis on volatile AI stocks. For instance, Nvidia’s share price moved more than 30 percent in just a few months during 2023–2024, creating opportunities for short-term trades.
Explore the key differences between fundamental analysis and technical analysis.
Thematic Diversification
Thematic diversification means spreading exposure across different parts of the AI ecosystem. Investors can apply thematic diversification by balancing AI chipmakers such as Nvidia and AMD, AI software providers like Palantir and C3.ai, and big tech integrators including Microsoft and Alphabet. This reduces reliance on any single company while keeping full exposure to AI growth.
Momentum Trading
Momentum trading relies on the idea that stocks showing strong upward or downward trends are likely to continue in the same direction for a period of time. Momentum trading in AI stocks is common after earnings reports or new product announcements, when prices surge with high volume. For example, Nvidia’s earnings momentum in 2023–2024 drove massive gains as traders followed the trend rather than fighting it.
News Trading
News trading is based on taking advantage of sharp moves that follow headlines such as earnings results, product launches, regulatory changes, or major investments. With news trading, the goal is to capture short-term trading opportunities by entering quickly after the news is released and exiting once the market stabilises. This approach can be profitable but also risky since prices may reverse just as fast.
Risks and Challenges in Trading or Investing in AI Stocks
AI stocks can offer strong opportunities, but they also carry significant risks. The industry is fast-moving and often volatile, so understanding these challenges is crucial before diving into this market.
- Valuation Risk: Many AI stocks trade at premium valuations. If growth expectations slow, sharp corrections may occur. For example, C3.ai lost over 60 percent from its peak despite the AI hype.
- Competition: The AI sector is fiercely competitive, with both startups and established players racing to secure market share.
- Regulation and Ethics: Global regulation is tightening. The EU AI Act introduced in 2024 aims to govern the ethical use of AI, which could increase compliance costs for companies.
- Volatility: AI stocks are highly sensitive to earnings reports and market sentiment. Nvidia’s market capitalization swung by over USD 400 billion between 2023 and 2024.
Conclusion
Artificial intelligence is shaping the future of global markets. Learning how to trade or invest in AI stocks gives investors a chance to participate in this transformation. The sector offers strong growth potential but also carries risks, which makes preparation and risk management essential. With VT Markets, you can access this opportunity by trading AI stocks through CFDs, allowing you to benefit from both rising and falling markets without directly owning the shares.
Start Trading AI Stocks Today with VT Markets
If you are ready to explore the opportunities in AI stocks, VT Markets offers the tools and support to get started. MetaTrader 4 (MT4) and MetaTrader 5 (MT5) provide a strong foundation with advanced charting features, fast execution, and access to a wide range of global markets. For those interested in artificial intelligence trading or investing, these platforms can also be integrated with third-party tools, giving traders the flexibility to adapt strategies to market conditions.
If you are not ready for the live market, you can practise with a VT Markets demo account to test strategies risk-free before going live. At the same time, the VT Markets Help Centre provides step-by-step guidance on platforms, strategy setup, and risk management to support your learning journey.
Start trading AI stocks today with VT Markets and take part in the future of global markets with confidence.
Frequently Asked Questions (FAQs)
1. What are AI stocks?
AI stocks are shares of companies that develop artificial intelligence technologies or make AI a central part of their products and services, such as Nvidia, Palantir, Microsoft, and Alphabet.
2. How to trade AI stock?
You can trade AI stocks by following these steps:
- Step 1: Understand how the AI industry works
- Step 2: Develop a trading plan
- Step 3: Choose a reliable broker
- Step 4: Open and fund your trading account
- Step 5: Decide how you want to trade (stocks, ETFs, or indices)
- Step 6: Decide to go long or short
- Step 7: Open your first trade
- Step 8: Stay informed and updated
3. What are the top AI stocks in 2025?
Nvidia, Microsoft, Alphabet, Palantir, and Tesla are among the most actively traded AI stocks in 2025.
4. What is the safest way to start investing in AI?
Investing in diversified AI ETFs or large-cap companies is generally safer than buying speculative small-cap AI stocks.
5. Can I trade AI stocks with CFDs?
Yes. CFDs allow you to go long or short on AI stocks with leverage, but this involves higher risk than direct investing.
6. Why are AI stocks so volatile?
High investor expectations, rapid innovation, and changing regulation make AI stocks more volatile than many other sectors.
7. Are AI stocks suitable for beginners?
Yes, but beginners should approach carefully. Starting with diversified ETFs or demo accounts can help new traders gain exposure to AI without taking on too much single-stock risk.
8. What is the difference between trading and investing in AI stocks?
Trading AI stocks usually means taking short-term positions to benefit from price movements, while investing is about holding them for the long term to capture industry growth.
