RBC: Buy these 17 future AI winners as the technology begins to transform the world (2023)

• RBC says that AI is one of the most transformative developments in tech in the last 20 years.
• The firm's tech analysts explained which stocks they think will benefit the most from generative AI.
• They added that in many cases, the "rising tide" of AI will benefit broad swaths of the market.

All of the hype and excitement around new artificial intelligence (AI) programs like ChatGPT makes it easy to forget that the technology itself isn't all that new. But RBC says its potential is every bit as enormous as it appears.

In a recent note to clients, the firm called generative AI (GAI) a "capacity unlock" that increases the capabilities of technology in general. It says there were three of these momentous technological breakthroughs before AI: the internet, software as a service and cloud computing, and mobility.

"Generative AI itself represents a major advancement in AI systems beyond deep learning and has flipped the switch on the purpose of AI from analyzing and learning to creating," wrote a team of analysts including Rishi Jaluria, Brad Erickson, Matthew Hedberg, and Matthew Swanson. "GAI has turned from a long-term bet into a near-term reality that has the potential to upend a broad array of industries."

The group wrote that AI will be a rising tide that enriches a large number of tech-focused businesses, and warned that companies that don't get on board quickly have a lot to lose.

According to the analysts, three broad categories of companies have the most to gain: cloud-oriented companies that incorporate AI quickly and use it to enhance their advantages; niche companies that use it to build on their leadership positions; and mid-size software companies that can use AI to narrow a gap against more established competitors.

Microsoft has gotten a great deal of attention in the early days of this new era, and the analysts agree the company is in a strong competitive position. But they said it's too soon to count out Alphabet, despite some of its recent stumbles, as AI search doesn't look like a major threat to its search revenue.

But it's not just the established tech titans that can profit from the advent of AI technology.

"We believe GAI's widespread adoption could also lead to commoditization for smaller companies in particular, allowing the ecosystem enablers like cloud providers & digital ad platforms to widen existing moats and accrue disproportionate value," wrote the RBC analysts. "We also would not discount the technology of close followers who, similar to Microsoft, have been investing in AI for more than a decade."

The analysts chose 17 stocks as the best plays on the AI trend right now. Those companies are below, along with their tickers and commentary about each provided by the RBC analysts.