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Amazon, Alphabet's AI to Pervade Smart Homes: Stocks to Watch

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Artificial intelligence (AI) is rapidly infusing our lives by taking over everyday technology. AI’s methodology of enabling machines to learn from experience and imitate human behavior has given rise to its widespread implementation in vital areas such as transportation, healthcare, banking, defense, agriculture, etc. Moreover, tech giants are eyeing artificial intelligence to run our homes too.

Big technology companies are trying to enter the home space, diversifying the range of AI-powered products from smartphone applications to smart devices that help our homes function. Therefore, it could be a good idea to keep tabs on a few stocks that are expected to ride the AI boom.

Amazon and Google’s New Smart Home Products

In a bid to outrun its competitors, Amazon (AMZN - Free Report) recently launched as many as 15 new products enabled by Alexa, a CNBC report cited last week. Amazon’s dedication toward its voice assistant space is remarkable, as Alexa will now be commanding over everything from wall clocks, microwaves, smart plugs, security devices and much more in our homes.

Amazon also revealed upgrades for its speaker Echo and new modes to add Alexa to third-party devices. Amazon’s Alexa is now smarter than before, with its new Alexa Hunches feature enabling it to suggest actions based on daily activities.

Alphabet (GOOGL - Free Report) is expected to reveal some notable AI-enabled gadgets as well, with smartphones, laptops and smart displays probably dominating the list. Google’s hardware event in October will be the launching pad for the company’s new smart home additions. Amazon and Google’s ambition to occupy and run the smart home space is entirely dependent on how smart their voice assistants are and how well they integrate with the smart devices around the house.

Amazon’s new Alexa-controlled products occupy devices from the living room, kitchen, bedroom and even the garage, with Echo Auto set to help while turning on a car. Echo products will be able to integrate with third-party devices, which will be an advantage. Bose, Hamilton Beach and P&G (PG - Free Report) are partnering with Amazon for integrating their devices with Alexa via Alexa Connecting Kit, per the CNBC report.

How Robust Will the Smart Home Market Be?

According to a report by Zion Market Research last month, the smart home market is expected to reach $53.4 in the next four years. The concept of a smart home revolves around every aspect of one’s house, which includes smart kitchen, home healthcare, security, lighting, access control, HVAC (heating, ventilation and air conditioning) control, etc.

Advanced home automation systems will also be an integral part of the real estate industry, as additional construction and wiring are necessary to accommodate new features that smart homes come with.

Rising demand for energy-efficient, secure homes is a major booster for the growing smart home market. Consumer convenience is a key driver too, as smart devices can now take care of the house.

Stocks to Watch

Since AI-enabled gadgets for our homes will be in focus, it would be prudent to take a look at the companies that are developing them.

Amazon is expanding fast into the smart home space, with its new products designed in line with its voice assistant Alexa. The company’s other AI implementation, Echo, is a notable business process initiative. Amazon carries a Zacks Rank #2 (Buy) presently and its shares have gained 65.5% year to date. Its earnings for 2018 are expected to grow 290.5%.

Alphabet has developed AI tools such as Google Lens, Duplex and Smart Compose for Gmail. The company is now developing AI-enabled gadgets to take over smart homes with laptops, smartphones and smart speakers with screens set to be launched in October. Alphabet currently carries a Zacks Rank #3 (Hold) and its shares have gained 12% year to date. The company’s earnings are expected to grow 24.6% for 2018.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Apple (AAPL - Free Report) is known for its voice assistant Siri introduced in 2011. The company’s Core ML is an example of machine learning framework for applications along with its self-driving cars. Apple sports a Zacks Rank #1 (Strong Buy) and its earnings for 2018 are expected to grow 27.7%. The iPhone maker’s shares have gained 30.5% year to date.

NVIDIA Corporation’s (NVDA - Free Report) powerful graphics processing unit (GPU) technologies are popular in AI research. Its AI-enabled driverless cars, deep learning frameworks and AI-powered devices for consumers are leading the way in AI development. NVIDIA carries a Zacks Rank #3 (Hold) and its shares have gained 37.4% year to date. NVDA’s earnings for 2018 are expected to grow 61.8% for the current year.

More Stock News: This Is Bigger than the iPhone!

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