Artificial intelligence (AI) has been around for decades. From industrial automation and unbeatable chess engines to self-driving cars and automatic vacuum cleaners, AI-assisted technologies are becoming a normal part of our everyday lives.

But the adoption and general awareness of AI accelerated dramatically in November 2022, when OpenAI released the ChatGPT AI platform. This ultramodern large language model (LLM) could do things previously seen as uniquely human. ChatGPT and its rivals can write halfway decent text, generate nearly photorealistic images and videos, and even create new music from a primordial soup of earlier examples. Large sets of human creations have become fodder for computer-powered, semi-creative productions.

A handful of companies are driving this generative AI boom, led by AI accelerator designer Nvidia (NASDAQ: NVDA). That stock has soared more than 1,000% higher in two years, powered by a 237% uptick in revenues and a ninefold boost to Nvidia’s free cash flows. The LLMs you see today wouldn’t be possible without Nvidia’s high-performance AI accelerator chips, and the company is often seen as the best AI stock on the market today.

But even stellar business performers can become overvalued. Nvidia’s stock trades at extremely lofty valuation ratios nowadays, and many die-hard bulls are ignoring the rise of alternative AI hardware solutions.

So I have a few Nvidia shares in my portfolio, but am not eager to buy more today. There are safer AI investments out there, and I’m here to show you a couple of great AI stocks not named Nvidia.

Data collected from Finviz.com and YCharts on 10/18/2024.

IBM’s strategic focus on enterprise-class AI

Yeah, you heard me: International Business Machines (NYSE: IBM) is one of the best AI stocks to buy right now.

Big Blue has been an AI innovator since the 1970s, introducing game-changing technologies such as the first speech recognition system and the first programming language for self-learning manufacturing robots. And IBM’s AI interest never faded. The company remains a leading AI researcher today, even though you don’t often see its name in generative AI headlines.

You see, IBM lets other companies mess around with consumer-friendly chatbots and image generation systems. Meanwhile, the company focuses its AI products on deep-pocketed enterprise clients. The IBM Watsonx generative AI platform delivers business-oriented features such as deep integration with other business-grade information systems, audit-ready paths from input data to generated content, and robust digital security.

So IBM took some extra time to prepare these AI tools for release, insisting on quality results instead of rushing a half-baked solution to the market. Now it’s time to reap the rewards of that strategic delay.

Watsonx has been around for a year and a half now, and has already generated more than $2 billion of generative AI orders. Next week’s third-quarter report will show how quickly corporate clients are embracing IBM’s AI solutions in a healthier economy. And as seen in the table, the stock looks downright cheap next to Nvidia’s high-flying shares.

UiPath’s AI-powered automation solutions

Process automation expert UiPath (NYSE: PATH) is another low-priced bet on a solid AI business. The company’s robotic process automation (RPA) may sound like an industrial hardware controller, but is actually software that helps businesses automate repetitive tasks.

Automated software has many benefits over their human counterparts in this area. Computers don’t get bored or tired. Their actions can’t result in “human error,” and UiPath’s sophisticated software robots don’t suffer from machine learning equivalents such as sloppy programming. With the recent addition of LLM functions, UiPath’s robots can even manage advanced but repetitive tasks like filling out forms and interpreting the meaning of text entered by end users.

“RPA is not AI; AI is not RPA,” according to UiPath. But the combination of robust RPA systems and powerful AI backends bring out the best of both worlds in a single job-automation process. UiPath’s tools are already game changers for clients with lots of rote information management activities. They will only grow more powerful over time.

UiPath’s shares have barely moved in two years, falling far behind other AI specialists and the S&P 500 (SNPINDEX: ^GSPC) market index. At the same time, trailing sales rose by 32% over the last two years, while free cash flows swung from a $134 million loss to $327 million of cash profits.

The stock is swooning while financial results are soaring, and UiPath’s AI-plus-RPA solutions are only getting more powerful. That’s why this game changer looks like a no-brainer buy today.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Amazon: if you invested $1,000 when we doubled down in 2010, you’d have $21,285!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $44,456!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $411,959!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

See 3 “Double Down” stocks »

*Stock Advisor returns as of October 14, 2024

Anders Bylund has positions in International Business Machines and Nvidia. The Motley Fool has positions in and recommends Nvidia and UiPath. The Motley Fool recommends International Business Machines. The Motley Fool has a disclosure policy.