Artificial intelligence (AI) is probably today’s hottest tech growth trend. Believed to be a vital cog of the Fourth Industrial Revolution, it is expected to impact almost all the sectors and generate a tremendous amount of wealth for its investors.
And as an investor, it makes sense to have exposure to AI stocks in your portfolios. To help you cut through the clutter and aid you in making smart investing decisions, we list here the 4 top artificial intelligence stock to buy for 2020 and beyond.
Microsoft Riding the Cloud Powered by AI
Microsoft [NASDAQ: MSFT] is an American multinational technology company that develops, manufactures, licenses, supports, and sells a range of software products, personal computers, consumer electronics, tablets, gaming and entertainment consoles, phones, and related services and devices.
Its best known software products include the Windows operating system, Office productivity applications, and Azure cloud services. Its Windows line of operating systems powers more than 93% of the desktop computers in the world.
Other notable products of the Redmond, Washington-based company include internet search (Bing), cloud computing (Azure), business-oriented social network (LinkedIn), software development platform (GitHub), and software development tools (Visual Studio), among others.
Microsoft believes that OpenAI, set up in 2015, will help it fortify its Azure cloud computing service by developing new AI technologies for it.
The investment is part of Microsoft’s new strategy and will help the company stay in the reckoning with respect to its rivals like Google, Facebook, and Amazon, which have all been paying big attention to AI in recent years.
Microsoft is going to launch its Xbox Series X game console this fall. Additionally, the tech titan is also expected to reap rich rewards from its Project xCloud gaming service where it is consistently integrating cloud capabilities of Azure into its gaming segment.
Cloud gaming has just started to take off and Microsoft, with its experience and expertise with its Xbox gaming business and in-house game development studios, finds itself strongly placed to gobble a big chunk of this burgeoning market which is estimated to be worth billions of dollars.
However, with growing competition, analysts expect revenue growth to taper a bit in 2020. But in the longer run, this is one stock which you should consider strongly in your portfolio, more so if you are keen on investing in growth stocks.
NVIDIA Corporation: Fast Becoming AI Powerhouse
NVIDIA Corporation [NASDAQ: NVDA] engages in the design and manufacturing of computer graphics processors for the gaming and professional markets, as well as system on chip units (SoCs) for the mobile computing and automotive markets.
The Santa Clara, California-based company revolutionized the PC gaming industry by inventing the graphics processing unit (GPU) in 1999. It operates in two segments, GPU and Tegra Processor.
Its primary GPU product line is labeled “GeForce”, which includes GeForce for PC gaming and mainstream PCs; GeForce NOW for cloud-based game-streaming service; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users.
The company has recently moved into the mobile computing market, with its Tegra mobile processors. In addition to GPU manufacturing, Nvidia provides parallel processing capabilities to researchers and scientists which make supercomputing inexpensive and widely accessible.
Plus has made significant advancements in other AI markets as well that include upscaling 1080p videos to 4K resolutions with deep learning technologies and offering AI services for IoT and 5G networks.
The company is leveraging the potential of AI in its gaming and professional visualization businesses as well by infusing its latest generation of GPUs with deep learning capabilities. The company’s GPUs are ruling the market for AI training in cloud data centers as well, which is great news given the rapid pace at which this market is growing.
Additionally, the acquisition of Mellanox will give NVIDIA the ability to penetrate further into the lucrative data center market by leveraging Mellanox’s data centers’ networking capabilities and technical know-how.
Alphabet: Deep-rooted Tech Giant & Emerging AI Powerhouse
Google Inc., the American multinational technology company that was founded in 1998 by Sergey Brin and Larry Page, today powers more than 70 percent of worldwide online search requests.
A subsidiary of the holding company Alphabet Inc. [NASDAQ: GOOG], Google has interests in Internet-related services and products, including search engine, cloud computing, AI, software, and hardware.
The Mountain View, California-based company’s product portfolio includes Google Search, Gmail, Google Drive, Google Cloud, Google Play, Google Home Google Maps, YouTube, and Google photos, among others.
The company also boasts of Android mobile operating system, the Google Chrome web browser, and Chrome OS, a lightweight version of Chrome. It also manufactures Google Pixel smartphone, Google Daydream virtual reality headset, etc.
Alphabet’s Google [NASDAQ: GOOG] has earned billions, and continues to do, as more and more ads move online. Its glittering portfolio consists of products and platforms such as Android, Chrome, YouTube, Google Maps, and Gmail, each boasting of more than one billion users. This gives it enormous web clout and enormous amount of data, which the advertisers find so alluring.
Google has been on the frontline when it comes to investment in AI, which should not come as a surprise given the company’s plans to evolve into the “AI-first world”.
Leading the way is search engine Google, which has been nothing short of the proverbial ‘golden egg laying hen’ for Alphabet’s AI services.
Meanwhile, Duplex is also an AI-driven voice assistant that helps users set up business appointments via Google Assistant. Sundar Pichai has been talking proudly about Google AI Health algorithm, which is capable of detecting breast cancer more accurately than doctors.
Additionally, Google’s AI division has been working on accurately predicting the weather and revolutionizing mobility with self-driving car project called Waymo. Alphabet’s health technology-focused subsidiary Verily seeks to combine technology with data science and AI to revolutionize healthcare.
Google’s PAIR initiative, which stands for People + AI Research, aims to make the partnership more fruitful and enjoyable for all the parties involved.
There are organizations that love to be forward looking but lack the resources to put their plans into action. Then there are organizations that have deep pockets but are not forward thinking.
What goes in Google’s favor is that it has the resources to invest billions in new growth avenues. The company calls it in moonshot opportunities or bets vital to its future success.
Amazon: Rapidly growing market of e-commerce and AI makes Amazon a safe bet
Amazon.com, Inc. [NASDAQ: AMZN] is an American multinational technology considered to be one of the Big Four tech companies, along with Google, Apple, and Facebook. The company, known for its technical innovation and revolutionizing online retail, operates in the field of e-commerce, cloud computing, digital streaming, and artificial intelligence.
Measured by revenue and market capitalization, Amazon is the world’s largest online marketplace, AI assistant provider, and cloud computing platform.
The Seattle, Washington-based company founded by Jeff Bezos (richest man on earth) operates through three segments: North America, International, and Amazon Web Services (AWS).
Amazon.com, Inc. performance in the year 2019 was less than stellar, with the online retail giant’s shares climbing 23% in contrast to the S&P 500 index roughly touching 29%.
What made it more disappointing was the fact that other big tech companies performed exceptionally. Analysts, however, are not unduly worried about the lukewarm performance, their assurance rising from the huge growth potential of e-commerce and the company’s solid performance of its cloud computing business.
Its nearest competitor in cloud segment Microsoft’s Azure performance has been stellar while another tech giant Alphabet has been angling to close the gap in the cloud services market.
Despite all these factors, Amazon Web Services dominates the cloud computing space, continuing to generate cash for the tech giant. Amazon is also making inroads into domains where its competitors enjoy a dominant position.
It has been gaining significant ground in the highly lucrative digital advertising market and emerging as a powerful rival to Alphabet and Facebook in the category.
The online advertising revenue of Amazon’s advertising business clocked a highly impressive growth of more than 45% year over year in the third quarter, with experts predicting that its share of the total U.S. digital ad market could climb to 14% in 2023 from its present 9%.
The massive dominance the company, virtually synonymous with online retail, has built in the e-commerce market will continue to fuel its growth and expansion in the years to come. With global retail e-commerce sales expected to hit $6.5 trillion by 2022, Amazon is going to be the biggest beneficiary.
With its massive online retail operations, unmatched distribution strength, aggressive retail strategies, and presence of thousands of sellers on its platform, Amazon faces no immediate threat from any competitor(s).
On top of that, its leadership position in voice-assistant interfaces and smart speakers and the emphasis it is placing on AI give it powerful advantages in generation-defining tech trends.
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