How to approach AI trading
Artificial intelligence is a fast-growing technology segment comprising companies with a history of significant stock market movements. Learn about the artificial intelligence industry, including AI trading strategies and how to trade AI stocks via CFDs with Capital.com.
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What is AI trading?
AI trading can refer to the trading of shares in publicly listed companies that develop or use artificial intelligence technologies – including tech giants that incorporate AI like Alphabet and Microsoft, but also pure-play AI companies like C3.ai and Nvidia, where AI is a more central focus.
Artificial intelligence has existed since the early days of computing. Its popularity has surged in recent years, with some top technology stocks pushing AI closer to the front and centre of their business models.
Due to progress in areas like generative AI and deep learning, artificial intelligence is increasingly prevalent in many industries including healthcare, transportation, e-commerce, finance and trading.
Types of AI stocks
AI stocks with the highest trading volume as of July 2024 include Nvidia, Microsoft, and Google. These stocks have high liquidity, making it easier to open and close positions quickly with minimal slippage.
- Nvidia became the most traded company in the world for the first time in June 2024. Since its shift to a more artificial intelligence centric strategy, Nvidia GPUs are used to train complex AI models and in deep learning, autonomous vehicles and data centres. Factors that may influence growth in Nvidia’s share price include new product releases, innovation and tech developments in the wider field of AI. Learn more about how to trade Nvidia CFDs.
- Microsoft is one of the most widely-traded technology stocks, popularly known for its Windows series of computer operating systems – alongside services, software and hardware products. AI underpins many of Microsoft’s business segments today with leading examples Azure AI, Bing AI copilot and Bing image creator. Microsoft made a $1 billion investment in OpenAI in 2019, securing its role as a major player in the emerging AI market. Learn more about how to trade Microsoft CFDs.
- Alphabet is a tech giant that built its success with the Google internet search engine and has since expanded to offer a broad range of web services, software and hardware products. AI plays a large role in enhancing many of Alphabet’s core services including search algorithms, advertising and cloud computing. Ongoing AI investments and acquisitions are one of many factors that influence Alphabet’s share price movements. Learn more about how to trade Alphabet CFDs.
| AI stock | Company focus | How AI is used |
| Tech giants | ||
| Microsoft (MSFT) | Software, cloud | Azure AI, Copilot, GitHub Copilot, automating coding tasks |
| Alphabet (GOOGL) | Search, ads, cloud | Google Search, YouTube recommendations, Google Assistant |
| Amazon (AMZN) | E-commerce, cloud | AWS SageMaker, Alexa, recommendation engines |
| Apple (AAPL) | Consumer tech | Siri, Face ID, iPhone's computational photography |
| Meta (META) | Social media, AR | Facebook and Instagram algorithms, AR and metaverse development |
| Pure play AI stocks | ||
| Nvidia (NVDA) | AI hardware, cloud | GPUs for AI, Nvidia AI platform for ML and autonomous systems |
| C3.ai (AI) | Enterprise AI | C3 AI Suite for predictive analytics and optimisation |
| Soundhound AI (SOUN) | Voice and conversational AI | Houndify platform for voice and natural language understanding |
| Veritone (VERI) | AI software, data management | aiWARE platform for unstructured data analysis and automation |
| Dynatrace (DT) | AI for cloud monitoring | Davis AI engine for cloud infrastructure and software intelligence |
Key AI price drivers: Nvidia
For traders interested in the wider AI market, Nvidia in particular offers exposure to the growth of artificial intelligence across industries. The following image highlights key price moves in Nvidia’s stock over recent years and the pivotal AI developments that drove them. Whether it’s the rise of AI in cloud computing, autonomous vehicles, or data centres, Nvidia has demonstrated its ability to capitalise on AI trends, making it a crucial stock to follow in this rapidly evolving market.
Past performance is no guarantee of future results.
Steps to trade AI
Here are some simple steps to getting started trading assets related to the AI sector.
Familiarise yourself with the stock market
Develop a solid understanding of the stock market by learning basic trading concepts like chart patterns, trading strategies and risk management to build your confidence when trading.
Find out about the key factors that influence market prices and trends, then move onto more advanced skills such as technical analysis.
Learn about the AI industry
Build your knowledge of artificial intelligence and industry trends by researching the latest news about market-moving events and pioneers such as Nvidia, Microsoft and Alphabet. Monitor live and historical price data to identify potential trends and patterns that may help to anticipate the markets.
Identify AI stocks
Discover AI trading opportunities by finding companies that interest you – then create a watchlist featuring these stocks and monitor their historical performance using fundamental and technical analysis.
Once you have a good understanding of the possible AI assets you would like to trade – and the trends they may follow – you’re ready to start building your trading strategy.
Build a trading strategy
Pick a strategy that matches your trading goals, availability and financial preferences. Are you seeking short term gains or longer term growth? How much time are you willing to spend before you can expect results? How much can you afford – or are willing – to risk?
Use the answer to these questions as a foundation to build a trading strategy that’s best for you.
Read our trading strategy guides to learn more about the approaches you could choose.
Trade AI with Capital.com
It’s time to find a reliable brokerage and set your strategy in motion. Capital.com is a multi-award-winning online CFD trading platform with an easy to use desktop application and mobile app. Join our community of over 690,000 traders in 183 countries and trade CFDs on over 3,000+ assets including AI shares, indices, commodities and forex.
Ease of use: Find a seamless experience with the information and tools you need to make better trading decisions.
Advanced trading tools: Charts, drawing tools and helpful resources to help you analyse historical price data, volume activity and trends.
Competitive spreads and transparent pricing: Know what you're getting with a broker that’s up-front about fees, and minimises costs with competitive spreads.
Risk management: Robust tools like stop-loss* and take-profit orders help reduce risk and protect your gains.
Educational resources: Guides, courses, webinars and videos to brush up on your knowledge and get up to speed.
Dedicated customer support: Talk to the team and get a direct response to your queries – Capital.com provides email, telephone, and live chat support in multiple languages.
Industry recognition and customer feedback: Choose a broker that’s won recent awards from leading industry authorities. Check out our exceptional customer feedback and ratings on independent review platforms like Trustpilot.
*Please note that basic stop-losses are not guaranteed and can be subject to slippage. You can choose to place guaranteed stops to place an absolute limit on your losses, but these will incur a charge if triggered. You can see these charges on our charges and fees page.
