Services activity in the US is holding up strongly according to recent PMI data, even as manufacturing shows more mixed signals. Companies tied to artificial intelligence and automation sit at the crossroads of this two speed backdrop. Investors are paying close attention to AI stocks that could help businesses manage costs and productivity. This article highlights three candidates from the AI Stocks screener worth a closer look.

The three stocks below are just a starting sample, and the full AI Stocks screen surfaced 203 more companies with equally compelling narratives that are not covered in this article. To identify and analyze your own ChatGPT and AI opportunities, go straight to the Artificial Intelligence/ AI Stocks screener.

Baidu (BIDU)

Overview: Baidu is a Beijing based internet group best known for its search and mobile ecosystem in China. It is now pushing ERNIE Bot and related AI cloud services as its main large language model and ChatGPT style offering for both consumers and enterprises, alongside DuerOS assistants, Apollo Go robotaxis and the iQIYI video platform.

Operations: Baidu generates its CN¥127.3b in reported revenue entirely from the People’s Republic of China.

Market Cap: US$31.2b

Baidu provides exposure to the AI assistant and LLM trend through ERNIE Bot, which runs on an AI cloud, autonomous driving and AI chip stack that is already integrated into its search, video and enterprise services. Recent earnings updates highlight a transition, with AI cloud infrastructure and GPU cloud revenue growing while traditional advertising and near term margins come under pressure. This shift is a key factor behind recent analyst target cuts. If Baidu converts ERNIE and its AI cloud into durable subscription and service revenue, today’s mix of moderate P/S, technology assets and concentrated exposure to China’s internet market could be viewed differently from the current narrative of near term earnings strain and execution risk.

Baidu’s AI cloud shift could be masking how different the business might look once ERNIE based subscriptions mature. Get the full context in the analysis report for Baidu

Build your own AI short list

Baidu and the two other AI stocks in this article all came from a single screener, but your best edge is in setting filters that match how you like to invest. Use our flexible Screener to mix valuation, growth and quality metrics, or tap into our curated Investing Ideas for ready made starting points.

Cerebras Systems (CBRS)

Overview: Cerebras Systems is an AI infrastructure company that builds wafer scale chips and rack scale systems specifically for training and running large language models and other generative AI workloads. Its turnkey hardware and software platform is sold to hyperscalers, foundation model labs and enterprises that want dedicated AI compute for ChatGPT style applications across the United States and international markets.

Operations: Cerebras Systems generates about $680.7 million in revenue from semiconductors, with around $236.6 million from the United States and $443.5 million from Europe, the Middle East and Africa.

Market Cap: US$49.9b

Investors looking at Cerebras Systems are really looking at a pure play on AI compute for large language models. The company’s wafer scale Engine and CS systems are built to push token throughput for inference and agentic AI far beyond typical GPU clusters, and recent OpenAI, AWS and AMD partnerships show how that technology is being wired into real world workloads. At the same time, the stock carries clear pressure points, including customer concentration around OpenAI, complex funding and dilution mechanics and a history of losses despite strong revenue potential. If you want exposure to the infrastructure that could power the next wave of ChatGPT style services, Cerebras Systems is a name that deserves closer scrutiny rather than a quick verdict.

Cerebras Systems could be accelerating into the center of AI compute while investor focus lingers on headline risks and customer concentration. Get the full story in the 3 key rewards and 2 important warning signs (1 is major!)

Alphabet (GOOGL)

Overview: Alphabet is the parent company of Google, running a global search, YouTube and Android ad business while also offering Google Cloud, where Vertex AI and the Gemini family of large language models power enterprise AI tools, infrastructure and services that directly link it to the ChatGPT and AI theme.

Operations: Alphabet generates about $367.1b in revenue from Google Services, $77.6b from Google Cloud and $1.5b from Other Bets, with small unallocated hedging losses.

Market Cap: $4,152.7b

Alphabet gives you exposure to both mature cash engines and the build out of AI infrastructure. Google Cloud and its Vertex AI and Gemini offerings connect Alphabet directly to spending on LLMs, AI infrastructure and enterprise tools, while the Google Services ad business and strong profit margins provide the funding for heavy AI capex. The company is channeling that cash into data centers, custom TPU chips and long term AI cloud contracts, although that has recently put free cash flow under pressure and required more debt and equity issuance. If you want a large scale AI play with deep research roots and the resources to keep funding the race, Alphabet is a notable option, but the level and timing of AI returns are still key questions.

Alphabet’s AI push is accelerating, while the balance between cash rich ads and heavy AI capex still feels underappreciated. Get the context that ties these pieces together in the analysis report for Alphabet

Seeking Fresh Alternatives Before Others Do

Some stocks start building quiet momentum long before headlines catch up. Spot fresh ideas while they are still under the radar for now and get in early.

• Look for potential cash flow strength before it gets fully reflected in prices by scanning the 48 high quality undervalued stocks, which focuses on quality, balance sheets and room for a breakout.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.