Over the years, artificial intelligence (“AI”) has become a major driving force behind technological advancement as it continues to bolster innovation, and increase efficiency and productivity across various segments. Thanks to these conveniences, companies around the world look set to increase their spending on AI solutions.
Per a report by the International Data Corporation published on Aug 4, worldwide revenues for the AI market are expected to
grow 15.2% in 2021 to $341.8 billion. The report further stated that in 2022, the AI market is ready to grow 18.8% and also looks set to “break the $500 billion mark” by 2024.
AI is bringing myriad conveniences to the table and one of the segments taking advantage of it is industrial automation. AI is the driving force behind robots, along with other technologies like machine learning (“ML”), which is a subset of AI, as well as Internet of Things. AI-enabled robots can perform regular tasks with precision, thereby reducing the need for human intervention. The completion time for tasks can be reduced significantly as robots can continuously carry out their operations without any break.
Also, AI is making significant in-roads within the retail segment, especially in online shopping. The e-commerce platforms are tailoring product recommendations for their users with the help of AI, by studying their purchase and search history, among others. AI-powered chatbots are also being used to respond instantaneously to user inquiries, thereby enhancing the user experience. AI is also improving supply chain management and logistics. With the help of AI, organizations are ensuring efficient management of inventory and warehouse, and improvements in delivery time of products, among others.
The battle of the voice assistants is also heating up as they are bringing more convenience to users. Owing to technologies like ML and natural language processing, voice assistants are improving their responses over time and carrying out more nuanced tasks. In fact, Statista estimated that by 2024, the number of digital voice assistants is set to cross the world’s population and
reach 8.4 billion units.
AI is also gaining ground within farming, potentially increasing agricultural output, while also offering other benefits to farmers. Per a
TechTarget article, agricultural AI bots are harvesting higher volumes of crops faster than humans, finding and eliminating weeds with improved accuracy, and so on.
Reflective of the positive developments that AI is bringing across various segments, it is quite expected that the AI market is ready to grow ahead. Per another report by Research and Markets, the global AI market is set to witness a CAGR of 35% from 2021 to 2025, as mentioned in a
Business Wire article. 4 Stocks to Keep an Eye On
The AI market seems poised to grow as companies look to increase their spending on AI solutions, owing to the benefits that AI is offering to users across several segments. This seems then a good time to look at stocks that can make the most of this trend. We have selected four such stocks that carry a Zacks Rank #2 (Buy) or 3 (Hold). You can see
the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. NVIDIA Corporation ( NVDA Quick Quote NVDA - Free Report) offers Data Center platforms and systems for AI, high performance computing, and accelerated computing, via its Compute & Networking segment. NVIDIA offers its NVIDIA DRIVE PX2 which is an open AI car computing platform that enables automakers and their tier 1 suppliers to accelerate autonomous vehicle production. In partnership with VMware, on Aug 24, NVIDIA announced the availability of NVIDIA AI Enterprise, which is an end-to-end, cloud-native suite of AI and data analytics software.
Shares of NVIDIA have risen 67.8% year to date and it currently has a Zacks Rank #2. The Zacks Consensus Estimate for its current-year earnings increased 5.8% over the past 60 days. The company’s expected earnings growth rate for the current year is 68%.
Microsoft Corporation ( MSFT Quick Quote MSFT - Free Report) offers Azure AI which is a portfolio of AI services for developers and data scientists for building and deploying AI solutions. On Apr 12, the company announced that it is acquiring Nuance Communications in an all-cash transaction of $19.7 billion, combining solutions and expertise for delivering new cloud and AI capabilities across healthcare and other industries.
Shares of Zacks Rank #2 Microsoft have risen 34.8% year to date. The Zacks Consensus Estimate for its current-year earnings increased 3.6% over the past 60 days. The company’s expected earnings growth rate for the current year is 8%.
Applied Materials, Inc. ( AMAT Quick Quote AMAT - Free Report) provides manufacturing equipment, services and software to the semiconductor, display and related industries. On Mar 16, the company unveiled its new playbook for process control that combines big data and AI technology to deliver an intelligent and adaptive solution. On Apr 5, the company unveiled its Actionable Insight Accelerator platform that uses big data and AI for accelerating semiconductor technology breakthroughs.
Shares of Applied Materials have risen 63.2% year to date. The Zacks Consensus Estimate for its current-year earnings increased 4.4% over the past 60 days. This Zacks Rank #2 company’s expected earnings growth rate for the current year is 64%.
Alphabet Inc.’s ( GOOGL Quick Quote GOOGL - Free Report) Google offers AI and ML products and solutions like Vertex AI, Contact Center AI, Document AI, and so on, via its Google Cloud platform. Google has also upped its presence in the voice assistant space as well with its Google Assistant. On Sep 1, Google Cloud and C3 AI announced the availability of C3 AI’s Enterprise AI applications on Google Cloud.
Shares of Alphabet have risen 60.7% year to date and it currently has a Zacks Rank #3. The Zacks Consensus Estimate for its current-year earnings increased 13.3% over the past 60 days. The company’s expected earnings growth rate for the current year is 73.8%.