4 Stocks To Gain As Artificial Intelligence Simplifies Life
Zacks Investment Research | Jan 20, 2020 08:58PM ET
Since its invention in 1955, Artificial Intelligence (AI) has constantly been studied by several researchers and many big firms have invested billions each year just to accomplish one goal -simplifying life.
This simulation of human intelligence process by machines, especially computer systems is the base of AI. With wide applications that include natural language processing (NLP), speech recognition and machine vision, the field has lot more to provide than just navigating people to their final destination.
Today, nearly 40% businesses use AI to run their daily course. A survey by IBM (NYSE:IBM), clearly shows that the scale of AI’s existence will grow to 80% to 90% over the next 18-24 months. What’s more, LinkedIn’s definitive list for emerging job growth reports for 2020 points at an annual growth of 74% in the AI specialists’ category, and ranks it as the number one job role for this year.
In fact, this report proves the myth wrong that AI is replacing human workforce. Rather AI collaborates with workforce and in the process saves considerable amount of time and effort by offering a smart and useful tool for better judgment.
According to Grand View Research, the global AI market is projected to witness a compound annual growth rate of 57% between 2017 and 2025 and expand into a $36-billion market. Additionally, according to estimates by research firm IDC, globally spending on AI systems will be $97.9 billion in 2023 versus $37.5 billion in 2019, courtesy of a compounded annual growth rate of 28.4%.
Embracing the opportunity, tech giants are spending dollars to cater to the needs of AI software, focusing on finding patterns and to make inferences from large quantities of data. From mitigating individual requirement to catering to business needs, this AI boom will be boosting three segments of the bigger tech space, AI chips, cloud computing and smart home devices.
Chips are a major requirement for AI systems from data centers to self-driving cars to health bots. Intel Corporation (NASDAQ:INTC) and NVIDIA Corporation (NASDAQ:NVDA) are in the race for a long time and are trying to design immaculate technology to cater to various needs.
With personalization becoming a core requirement, giants like Microsoft Corporation (NASDAQ:MSFT) , Alphabet Inc. (NASDAQ:GOOGL) and Amazon.com, Inc. (NASDAQ:AMZN) are using AI to sell products and services to millions of customers. Though voice-activated smart home devices trended in the past decade, the usage of smart tech has been reshaped by many others. For instance Netflix, Inc. (NASDAQ:NFLX) uses AI to personalize Internet TV content for its subscribers.
Meanwhile, Google and Microsoft are constantly pushing AI technology into cloud computing and selling AI analytical services to business customers.
4 Stocks to Watch Out
With already fierce AI competition in industries like financial services and cybersecurity, the opportunities for an uptrend in the technology is certain. Hence, keeping the growth trend in mind we have selected four promising AI stocks that can give handsome returns.
Alphabet Inc.’s search engine Google, has been a gold mine for AI services. The giant ventured into AI with the launch of Google Brain in 2011. In fact, this Zacks Rank 2 (Buy) company recently released open datasets to help researchers build better tools to detect fakes. CEO Sundar Pichai on several occasions cited the company’s AI developments that include a Google Health algorithm which can spot breast cancer more accurately than doctors.
Additionally, Google’s AI division has also been working on accurately predicting the weather and its self-driving car unit, Waymo. The company’s expected earnings growth rate for the current year is 6.6%. Shares of Alphabet have risen 37.2%, outperforming the Zacks Zacks Investment Research
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