3 top AI stocks to invest in right now
Posted: 28 March 2017 | By Darcie Thompson-Fields
Artificial intelligence is dominating technological innovation and most tech companies are fighting to get into the game. Though the technology is in its infancy investors may be asking themselves how best to capitalise on the growing trend.
With that in mind, The Motley Fool has listed the top three companies with solid artificial intelligence programs to get investing in and the chosen few won’t surprise you. The investment advice firm has named Amazon, Google parent company Alphabet Inc and IBM.
Amazon CEO Jeff Bezos believes that AI could be the fourth pillar of the company’s business that include its e-commerce, cloud hosting unit Amazon Web Services and its Prime membership program.
Amazon grew its revenue to $46 billion in its most recent quarter, so its AI contribution is currently microscopic, but that could change. RBC Capital Markets predicts that Alexa could contribute an additional $10 billion annually by 2020.
Google has been investing heavily in deep learning for years, the result of which is an artificial neural network known as Google Brain. The company’s AI powered Google assistant is available in many of its products but is primarily the foundation for its Google Home smart speaker.
With $26 billion in revenue for the most recent quarter, Alphabet will notice little effect from Home just yet; this is a new product, so we don’t have data for how popular it is, but the potential market is huge. Activate.com estimates that smart speakers will be in 21 million homes by 2020.
IBM Watson is undoubtedly powering the AI efforts of many early adopters. The company has developed a large number of partnerships using the abilities of its cognitive computing.
IBM has yet to disclose Watson’s contribution, but “strategic imperatives,” where Watson’s revenue is reported, grew 13% in 2016 to account for 41% of total revenue.
Increasing revenue and efficiency with AI
“These companies are at the forefront of the AI revolution, but AI innovations represent only a portion of their total business. Investors should avoid investing in any of these companies based solely on the advantages represented by AI.” Danny Vena of The Motley Fool advised.
“That said, if you like any of these companies and are interested in adding AI to your portfolio, each offers that opportunity. While it may be difficult to quantify many of the benefits, we do know that AI can help increase revenue and efficiency, provide a compelling and productive ecosystem to consumers, and provide new opportunities for business.”