Want to invest in ChatGPT but not sure how? While it is impossible to buy ChatGPT stock directly because it’s not publicly traded, investors can look for alternative options and consider buying shares in companies that have heavily invested in ChatGPT. For instance:
Here’s a simple guide to get you started:
- Do Your Research: Look for solid alternatives or companies related to ChatGPT.
- Open a Brokerage Account: To make the right choice, you should compare the fees, conditions, and how easily you understand the platform and the brokerage company's concept.
- Fund Your Account: Deposit money into your brokerage account.
- Place Your Trade: Buy shares of your chosen companies.
- Keep an Eye on Your Investment: Monitor your portfolio and make changes as needed.
In this guide, we will take a deeper look at how to invest in ChatGPT alternatives in 2024.
About Open AI: ChatGPT is fully owned and operated by OpenAI, an artificial intelligence research lab known for developing advanced AI models. The company was founded in December 2015 and focuses on creating safe and scalable AI technologies. It often collaborates with other tech leaders to further its research and application goals.
If you decide to invest in AI-related stocks by purchasing shares of ChatGPT alternative companies, here's our 5-step guide to assist you:
Step 1. Do Your Research.
As AI technology continues to advance, its transformative potential becomes increasingly apparent, revolutionizing the way we perform many daily computing tasks.
These advancements are a major reason for the appeal AI technology holds for investors seeking to capitalize on the growth potential of leading AI stocks in industries such as software development, chip manufacturing, and crypto. However, it's crucial to stay level-headed and avoid impulsive decisions. Before investing, consider factors such as the company's financial performance, competitive position, and growth prospects in the AI sector.
To invest in ChatGPT indirectly or gain exposure to the AI sector, you can consider these stocks:
| Company | Market Cap | 12 Months Performance |
|---|---|---|
| Microsoft (NASDAQ:MSFT) | 3.313T | +36.24% |
| C3.ai Inc (NYSE:AI) | 3.37B | -13.08% |
| Alphabet (GOOG) | 2.218T | 51.81% |
For such research to give good results, following questions should be considered:
- What is the company's history?
- How has it performed in the past?
- What are the risks associated with investing in the company?
- How does the company compare to its competitors?
- What is the company's strategy for growth?
To find answers, check the company's annual and quarterly reports, balance sheets, income statements. Its website and third-party evaluators for the comprehensive analysis.
There are several key financials that you should know to make informed investment decisions. Here are a few important ones:
- Revenue: Revenue is the total amount of money a company generates from its operations. It is an essential measure of a company's size and growth potential.
- Net Income: Net income is a company's profit after all expenses have been deducted from its revenue. This is a good indicator of a company's profitability.
- Earnings Per Share (EPS): EPS is the amount of a company's profit that is allocated to each outstanding share of stock. It measures a company's profitability and can be used to calculate the P/E ratio.
- Debt-to-Equity Ratio: The debt-to-equity ratio indicates a company's leverage, or how much debt it has relative to its equity. It is calculated by dividing the company's total liabilities by its total equity. A high debt-to-equity ratio may indicate that a company is taking on too much debt and could be at risk of defaulting on its loans.
- Return on Equity (ROE): ROE measures how much profit a company generates for each dollar of shareholder equity. It is calculated by dividing the company's net income by its total equity. A high ROE may indicate that a company uses its shareholders' money efficiently.
- Price-to-Earnings Ratio (P/E Ratio): The P/E ratio is a measure of a company's current stock price relative to its earnings per share (EPS). It is calculated by dividing the current stock price by the EPS. A high P/E ratio may indicate that the stock is overvalued, while a low P/E ratio may indicate that the stock is undervalued.
These financials can give you a good starting point for analysing a company's financial health and growth potential. However, it's essential also to consider other factors, such as industry trends, competition, management, and macroeconomic conditions, when making investment decisions.
Do not forget to check what analysts say about the company, but remember that no one can predict the exact future price due to many factors.
Also, remember to regularly read the latest news and check what other investors think of the company.
Step 2. Open A Brokerage Account
To start investing, you'll need a brokerage account. Brokerage companies vary in commission fees, available markets, platform complexity, and ease of account opening, so choose one that fits your needs.
Using eToro as an example, we will show how you can open such an account:
| 1 | Register your account here. Registration is free, after it, it is not necessary to start investing immediately. You can first use this account to practice with a virtual portfolio eToro demo account. |
| 2 | Provide your personal details, such as your name, email address, and password for your account. |
| 3 | Verify your email address by clicking on the link sent to you in an email from eToro. |
| 4 | Enter additional information, including your date of birth, address, and phone number. |
| 5 | Upload a copy of your government-issued ID (such as a passport or driver's license) and a proof of address (such as a utility bill or bank statement) to verify your identity. |
| 6 | Fund your account using a variety of payment methods, such as credit/debit cards, bank transfers, or e-wallets. |
Step 3: Fund Your Account & Decide How Much to Invest
After completing the registration process, the next step is to transfer funds to your brokerage account.
To decide how much to invest, analyze your financial situation:
- Time Horizon: How long you plan to hold an investment (short-term, medium-term, or long-term). This affects your risk tolerance and expected returns.
- Risk Tolerance: How much risk you're willing to take, influenced by your financial situation, goals, and personal preferences.
- Goals: Your specific objectives, such as building wealth, generating income, or saving for retirement.
Before investing, ensure you have:
- An emergency fund covering 3-6 months of expenses.
- A budget for your investing strategy.
- Emotional readiness, as a clear mind is crucial.
Step 4. Place Your Trade:
Once you have determined how much you want to invest, you can place your order to buy stocks.
You have 2 types of orders to choose from:
- Market order: A market order is an order to buy or sell stocks at the current market price.
When you place a market order, you are telling your broker to execute the trade at whatever the current market price is, which may not be the same price you saw when you decided to place the order.
Market orders are typically executed quickly and are often used when investors want to buy or sell stocks speedily and want to take advantage of a good opportunity. - Limit order: A limit order is an order to buy or sell stocks at a specified price or better. When you place a limit order, you are essentially setting a "limit" on the price you are willing to pay (or receive) for the stocks. Limit orders can be helpful for investors who want to be more precise about the price at which they buy or sell a stock and who are willing to wait for a specific price to be reached.
It's important to understand each type of order's risks and potential benefits before placing an order and to consider factors such as the current market conditions and the volatility of the stock you are interested in.
Step 5. Keep an Eye on Your Investment:
Regularly monitor your investments and set a stop-loss to protect your portfolio.
Monitoring keeps you informed about performance and allows strategy adjustments. A stop-loss order automatically sells a stock if it falls below a certain price, limiting losses.
Avoid overreacting to short-term market fluctuations; remember that stocks often dip before rebounding. Review your strategy regularly to ensure it aligns with your goals and risk tolerance. Stay informed and proactive to make your investments work for you.
If you want practical trading experience and to improve your strategies, consider opening a demo account.
