According to an Artificial Intelligence in Agriculture Market - Growth, Trends and Forecasts (2020 - 2025) report by ResearchAndMarkets.com, artificial intelligence (AI) in agriculture market generated revenues of $584.0 million in 2018 globally and is predicted to witness a CAGR of 38.3% in the following years.
Farmers prefer drone analytics in their farms as the bots are able to fly autonomously in an environment filled with obstacle. The data thus collected help farmers in making irrigation schedules, estimating yield, scanning soil health and using fertilizers and pesticides.
Artificial intelligence has not only made farm analytics easier, it also offers solution for rapid urbanization and changing consumption habits.
Key Drivers of AI in Agriculture
Artificial intelligence aims at making life simpler and its capabilities such as self-correction, learning, and reasoning make implementation and application easier. For traditional field agriculture, which is labor intensive and demands ample precision, AI promises to make farmers’ life easier.
Moreover, several factors drive growth of AI in agriculture. One of the prime drivers is shortage of labor. Aging farmers are a prime reason for the shortage along with difficulty in finding skilled labor. Moreover, since young farmers are finding farming an unattractive profession, automated farming operations are gaining importance.
In fact, according to the International Labor Organization (ILO), agricultural labor declined from 81% to 48.2% in developing countries. On the other hand, demand for agro-products has been increasing exponentially.
Demand for AI in agriculture is constantly growing with the use of robotics to substitute labors. Agro-bots can perform jobs like weeding, hay bailing, and seeding with precision and efficiency.
Per the United Nations (UN) report, world population is predicted to reach 8.6 billion by 2030. This surge will increase demand for agricultural products.
In China, drones are being use to spray pesticides in cotton fields. These can spray over 1,544 square miles at one go. Governments in several countries are encouraging usage of such drones and agro-bots as these are time-efficient and improve agricultural output.
What’s more? Several private companies and AI start-ups are rapidly developing agro-tech to support farmers. One such example was displayed at CES 2020 by Blue River, a part of Deere & Company (DE - Free Report) . Blue River’s See and Spray is a weed control machine, powered by a Nvidia chip. The machine uses AI to distinguish between weeds and crops before spraying liquid herbicide.
5 Firms Focusing on AI
Per the ResearchAndMarkets.com report, the global Artificial Intelligence in agriculture market may see CAGR of 26.2% during the 2019-2024 period. Hence, we can assume that AI will help in transforming the agricultural space in the near future. Investors can make the most by investing in these five stocks that focus on artificial intelligence.
Microsoft Corporation (MSFT - Free Report) develops, licenses, and supports software, services, devices, and solutions. Microsoft’s Azure platform helped the tech-giant launch the AI factory for AgriFood along with Danone. The project aims to help AI start-ups to accelerate digital transformation of the food sector through AI and cloud computing.
The company’s expected earnings growth rate for the current year is 18.7% compared with the Zacks Computer - Software industry’s projected earnings growth of 5.4%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.4% upward over the past 60 days. Microsoft sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
International Business Machines Corporation (IBM - Free Report) operates as an integrated technology and services company. The company is using AI for precision agriculture in India and other countries, working alongside government in resolving food shortage and draught.
The company’s expected earnings growth rate for the current year is 4.3% against the Zacks Computer - Integrated Systems industry’s projected earnings decline of 1.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 1.2% upward over the past 60 days. IBM carries a Zacks Rank #2 (Buy).
Intel Corporation (INTC - Free Report) provides computing, networking, data storage, and communication solutions. The company plays a role technology-enabled innovation that helps in integration in sectors like agriculture and healthcare.
The company’s expected earnings growth rate for the current year is 2.5% against the Zacks Semiconductor - General industry’s projected earnings decline of 6.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.7% upward over the past 60 days. Intel sports a Zacks Rank #2.
Apple Inc. (AAPL - Free Report) designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories. According to CB Insights, the iPhone maker has acquired over 20 AI companies since 2010.
In fact, Apple’s technology is being used for farm irrigation systems in Namibia where Konigstein Capital has installed smart irrigation systems, which can be controlled with an iPad. Farmers can control water pivots through their iPads, thus saving time, providing 24-hour access to farms and also enabling fast repairs.
The company’s expected earnings growth rate for the current year is 15.9% compared with the Zacks Computer - Mini computers industry’s projected earnings growth of 11.3%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 5.4% upward over the past 60 days. Apple carries a Zacks Rank #2.
Amazon.com, Inc. (AMZN - Free Report) The company’s Amazon Web Services (AWS) offers infrastructure to companies to help them leverage machine learning, data analytics, storage, security, and much more. In fact, AWS helps in designing predictive weather models and other precision agricultural techniques to help reduce crop loss resulting from unpredictable weather.
The company’s expected earnings growth rate for the current year is 19.8% compared with the Zacks Internet - Commerce industry’s projected earnings growth of 4.9%. The Zacks Consensus Estimate for the company’s current-year earnings has been revised 3.7% upward over the past 60 days.Amazon.com holds a Zacks Rank #3 (Hold).
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