Artificial Intelligence Stocks – What’s behind the scenes?

What is Artificial Intelligence, aka AI?

The year 2023 has brought Artificial Intelligence (AI) and AI stocks into the mainstream through widespread familiarity with the now-popular application ChatGPT. The popular fascination with ChatGPT made it synonymous with AI in the minds of most consumers. However, it represents only a tiny portion of how AI technology is used today.

Artificial intelligence refers to the simulation or approximation of human intelligence in machines.

Artificial intelligence is based on the principle that human intelligence can be defined so that a machine can easily mimic it and execute simple or more complex tasks.

Artificial Intelligence vs Machine Learning

The ideal characteristic of artificial intelligence is the ability to rationalize and take actions that have the best chance of achieving a specific goal.

A subset of artificial intelligence is machine learning (ML), which refers to the concept that computer algorithms can improve automatically through experience.

Deep learning techniques use artificial neural network structures akin to humans’ brains, enabling automatic learning by absorbing vast amounts of unstructured data such as text, images, or video.

Artificial Intelligence Applications and Examples

AI executing “simple” tasks is defined as weak AI.

Weak AI includes popular applications like Amazon’s Alexa, Apple’s Siri, Google’s advanced search engines, Netflix and Youtube’s recommendation systems, Facebook targeted ads, chatbots (see OpenAI’s ChatGPT), warehouse automation and autonomous vehicles.

Artificial intelligence also has applications in the financial industry, where it is used to detect frauds and flag suspicious activity, and in the healthcare industry for diagnostics, identifying treatments, and aiding in surgical procedures in the operating room.

There are also thousands of successful AI applications exploited to solve problems for specific industries or institutions ranging from supply chain management, weather forecasting, energy storage, military logistics, fake news detection, etc.

On the other hand, Strong AI is a theoretical form of AI, classified as Artificial General Intelligence (AGI), where a machine would have the same intelligence as humans or even be more intelligent than humans, so-called Artificial Super Intelligence (ASI).

While strong AI is still entirely theoretical, with no actual application today, the best examples of ASI might be from science fiction, such as HAL 9000, the superhuman computer assistant in 2001: A Space Odyssey.

Artificial Intelligence History

Despite what’s generally thought, Artificial Intelligence is not a novelty as it was officially born about 70 years ago at a workshop at Dartmouth College (1956, USA.) The attendees, who became the founders and leaders of AI research, produced programs that played games, solved algebra problems, and translated languages.

By the middle of the 1960s, Artificial Intelligence related research in the US was heavily funded by the Department of Defense, and laboratories had been established worldwide.
Researchers of those times believed that machines could replace man in any job. Although they proved too optimistic about replacing AI for everyday tasks, AI has been on a constant uptrend thanks to faster computers, algorithmic improvements and access to large amounts of data.
By 1985, the market for AI had reached over 1 billion dollars.

Few people know that 2015 was a landmark year for Artificial Intelligence since Google incorporated AI in its proprietary algorithms to enhance the user experience from search queries.

In a 2017 survey, one in five companies reported incorporating AI in some offerings or processes. Research into AI has increased by more than 50% ever since.

While the possible fields of application of AI are virtually limitless, many remain sceptical and continue to raise concerns about the potential threats that widespread use of AI could create (see more in the Frequently Asked Questions section.)

Artificial Intelligence Stocks Market

The Artificial Intelligence market has grown steadily since the early days and is still snowballing.
The AI sector is expected to grow between 20% and 30% annually in the next five years.
Total spending on AI systems is forecast to reach $97.9 billion in 2023, up from $37.5 billion in 2019.

In 2019, WIPO reported that AI was the most prolific emerging technology in terms of the number of patent applications and granted patents.

The AI markets with the largest sizes are:

• The Internet of Things
• Big data technologies
• Robotics
• 3D printing
• 5G.

The sectors ordered by the magnitude of AI application are:

• Telecommunications
• Transportation
• Life and medical sciences
• Personal devices
• Computing
• Human–computer interaction.

Artificial Intelligence Stocks to watch

Artificial Intelligence stocks can be of two main types:

1. Companies that design, develop and sell useful and powerful AI tools and services to customers or other businesses,
2. Companies that leverage AI to enhance operations efficiency, increase sales profitability, and streamline part of their business activities.

To learn more about Artificial Intelligence stocks types, follow this link https://www.gainshore.com/best-artificial-intelligence-etfs/#the-artificial-intelligence-stock-market

The problem with Artificial Intelligence stocks is that it is not so easy to assess how much a company is involved with artificial intelligence, how much a company can benefit from artificial intelligence, and how far this can translate into an increase in sales and profits.

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In this paragraph, we will list the artificial intelligence stocks that can profit the most from the growth and applications of the Artificial Intelligence market.

Microsoft (MSFT)

While it is not possible to directly invest in OpenAI, the ChatGPT company is, in fact, unlisted, investors can get indirect exposure to OpenAI by investing in Microsoft.

Microsoft earlier this year announced that as part of the third phase of its partnership with OpenAI, it would make a multiyear, multibillion-dollar investment. Estimates say that Microsoft‘s total investments in OpenAI could surpass $ 10 billion, equal to about 30% of OpenAI‘s current valuation.

Microsoft’s long-term partnership with OpenAI is part of the company’s broader push into AI.

Microsoft has recently incorporated AI into its Bing search engine and Edge browser, and it appears likely that Microsoft’s use of the chatbot technology will only grow.

Google (GOOGL)

Alphabet subsidiary Google has been using Artificial Intelligence for its search engine since 2015.

In response to ChatGPT and its potential threat of lowering search engine-based searches and, in turn, hurting advertisement profits materially, Google is set to launch its proprietary chatbot very soon. Known as Bard AI, the chatbot has been under development for the past two years and entered the testing phase in early February 2023. Ultimately, the company will incorporate AI technology into the Google Search tool.

With Google, we have a clear example of how difficult it is to predict whether AI will have a positive, neutral, or negative impact on an established business that has already been heavily involved with AI for a long time.

Nvidia (NVDA)

Nvidia is a graphics processing unit leader. The top-edge company’s graphics processing unit (GPU) chips are vital to many machine learning training phases, as these typically demand massive amounts of computing power.

This has led to Nvidia holding a key position in artificial intelligence. Specifically, its A100 chip has a substantial share of the AI market, becoming one of the most vital pieces of hardware in the entire industry.

Amazon (AMZN)

Amazon continues integrating AI technology into all its businesses, from e-commerce to video streaming, e-books and cloud computing.

The highest-profile examples of Amazon’s AI efforts are the voice-activated Alexa technology and Amazon Go automatic grocery stores.

Furthermore, Amazon employs its AI SageMaker, a machine learning tool that enables developers to create, train, and deploy machine learning models in the cloud.

C3.ai Inc (AI)

As the stock ticker AI shows, C3.ai is an AI pure play, as the company focuses entirely on artificial intelligence applications.

C3.ai offers software (SaaS) service that allows companies to use artificial intelligence for specific needs. The company’s AI tools serve a variety of sectors, from defence to energy and IT.

C3.ai claims to offer unique services that have no substitute. C3ai was one of the first movers in the AI industry.

IBM (IBM)

Bluechip multinational technology company IBM is the leader in AI software platforms, with a 13.7% market share in 2020, up 46% from the prior year.

Yamaha Motor (7272.T, YAMHF)

Yamaha Motor Co., Ltd. is a Japanese manufacturer of motorcycles and marine products such as boats and outboard motors. What is less known about Yamaha Motor is that the company has one specific segment focused on Ai and Robotics, which comprises two categories:

–              Surface Mounters and Industrial Robots,

–              Industrial use of Unmanned Helicopters.

Surface mounters are industrial robots that mount electronic components onto the printed circuit boards used in various electric and electronic products, including the electrical components for smartphones and automobiles. Yamaha Motor has an expansive lineup of industrial robots that includes single-axis robots, Cartesian robots, SCARA (Selective Compliance Assembly Robot Arm) robots, articulated robots, and linear conveyor modules. These contribute toward automating and streamlining a variety of manufacturing processes, from transfer and supply to assembly and inspection.

Yamaha’s industrial-use uncrewed helicopters are primarily found at work in the agriculture industry for aerial crop dusting and other uses, helping to modernize farming and addressing the pressing issues presented by a shrinking and ageing workforce. More recently, remote-controlled unmanned systems have garnered attention for their potential as aerial solutions for various fields, from smart agriculture to observation, surveys, and transport.

With revenue growth of 44.9% in 2021 vs 2020 and 59.1% vs 2019, the Robotics segment is the fastest-growing segment, and the business is envisaged to advance by another 15%+ in 2023, mainly driven by demand from Asian countries.

Tesla Inc. (TSLA)

While Tesla cars may not be fully autonomous, they still utilize AI to make a series of self-guided driving decisions.

Tesla plans to continue to invest heavily in AI and be at the forefront of autonomous vehicles and robotics.

How to Invest in Artificial Intelligence Stocks

Many artificial intelligent companies today have a private structure, meaning their shares cannot be purchased in a regulated market.

While investing in private equity may require very high minimum capital amounts (hundreds of thousands or millions) and long-term commitment (10-15 years), at Gainshore, we focus on listed companies whose stocks are daily liquid and can be accessed with any starting amounts (<$100).

What Artificial Intelligence Stocks to Invest in

We have been scrutinizing and constantly monitoring about 300 hundred stocks from the Artificial Intelligence, Automation and Robotics industries, like Microsoft (MSFT), Google (GOOGL), and NVIDIA (NVDA).

After a thorough review of all the AI stocks in the world, only 2 out of 250 AI stocks appear to be solid undervalued opportunities with significant upside potential and limited downside risk. This shows how important it is to use Investment Research professionals before investing.

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Frequently Asked Questions

What are some of the main advantages of Artificial Intelligence?

• Reduced time for data-heavy tasks.
• Productivity increase.
• Higher rate of success. AI has proven to be as good or better than doctors at diagnosing certain cancers.
• Improved customer satisfaction and support as AI-powered virtual agents are available 24/7.

What are the main risks of Artificial Intelligence?

• Algorithmic bias. AI programs can become biased after learning from real-world data, and programmers are often unaware of the bias.
• Increase in unemployment. Technology has tended to increase rather than reduce total employment in the past, but most economists acknowledge that “we’re in uncharted territory” with AI.
• Copyright. Criticism has been raised about whether and to what extent copyright laws protect the works created with AI’s assistance.
• Dangerous use of AI. AI can provide several tools that are particularly useful for authoritarian governments, such as intelligent spyware, recognition and surveillance systems, misinformation production and lethal autonomous weapons. Dozens of countries today are reported to be researching battlefield robots.
• Existential risk. AI machines may be able to improve themselves to the point that humans can no longer control them.

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SOURCES

https://en.wikipedia.org/wiki/Artificial_intelligence

https://www.investopedia.com/terms/a/artificial-intelligence-ai.asp

https://www.techtarget.com/searchenterpriseai/definition/AI-Artificial-Intelligence

Disclaimer: Nothing in this write-up is financial advice. Gainshore’s founder, partners, and employees may hold long or short positions in some or all the stocks mentioned in this article. This article was written by Gainshore and expresses our own opinion. Gainshore has no business relationship with any company whose stock is mentioned in this write-up.
Before making any investment, potential investors should do their own proper due diligence on any name directly or indirectly mentioned in this article. Investors should also consider seeking advice from a broker or financial adviser before making any investment decisions. Any material in this article should be regarded as general information and not relied on as a formal investment recommendation.