Artificial intelligence (AI) seems to go predictably awry in the movies. Films like “The Matrix” or “The Terminator” turn robots on unsuspecting humans and a long war ensues.
But the real AI technology under development intends to accomplish the opposite — improve our everyday lives and free up time for more productive activities.
Interested in backing the industry? Read on for Benzinga’s top picks for the best artificial intelligence stocks.
Artificial Intelligence Stocks to Watch:
- Artificial Intelligence Stocks to Watch:
- Overview: Artificial Intelligence Stocks
- Best Online Brokers for Artificial Intelligence Stock
- Features to Look for in Artificial Intelligence Stock
- Artificial Intelligence Stocks to Watch Out for This Year
- Biggest Artificial Intelligence Movers of the Day
- Investing in Intelligent Machines
Overview: Artificial Intelligence Stocks
Most Americans were introduced to AI by the 1968 Stanley Kubrick classic “2001: A Space Odyssey.” But AI research actually predates modern science fiction going all the way back to the 1940s.
Enhanced computer technology and memory space allowed the IBM supercomputer Deep Blue to defeat Garry Kasparov, world chess champion, in 1997. AI programs have beaten the best of mankind at a number of contests in recent years, including IBM Watson’s victory over Jeopardy Champion Ken Jennings.
AI advances are everywhere today. Amazon uses AI to recommend products to shoppers, Google utilizes it in searches and Facebook even scoops up artificial intelligence startups without abandon.
Research increases as computational power grows. Companies investing heavily in AI today could pave the way for more growth in the future.
Best Online Brokers for Artificial Intelligence Stock
Artificial intelligence continues to grow at a rapid pace and finding shares to invest is no issue at most brokers. It’s easy to jump in as stocks and ETFs trade commission-free across the board now.
Take a look at our features to look for in artificial intelligence stock before you commit.
Features to Look for in Artificial Intelligence Stock
- True AI focus: Most major tech companies devote some financial and human capital toward AI development, but few have artificial intelligence at the forefront. Invest in a company that keeps an AI focus.
- Strong management: The future of AI is hard to predict because technology moves fast while public and federal perception remain somewhat stagnant. The best companies involve vision and leadership from executives who want more than just a happy conference call every 3 months.
- Pipeline of projects: Profits from artificial intelligence come from a variety of angles — driverless cars, virtual assistants, smarter search, automated customer service and more. Look for companies with a variety of projects consuming energy and capital.
Artificial Intelligence Stocks to Watch Out for This Year
AI development may steamroll forward, but legislation and regulation of new technologies are always a step behind. It’s important to keep in mind the role the government plays in unleashing the profits of these companies.
AI research still makes some uneasy. Automation does have the potential to cause massive disruptions in the job market. Profiting from investments in AI will require patience, fortitude and probably a little legislative luck.
Here are our AI stocks to watch out for this year.
1. NVIDIA Inc. (NASDAQ: NVDA)
NVIDIA is responsible for many of the graphics processing units (GPUs) inside the most powerful video game consoles. But its vision exceeds what you see on an XBox or PlayStation.
NVIDIA’s investments in AI research and development extend into many different avenues — DRIVE AGX for driverless cars, Tesla for AI-infused data centers, EGX for edge computing and NGX for deep learning software.
NVIDIA has over 13,000 full-time employees. It’s been led by founder and CEO Jen-Hsun Huang for nearly 30 years.
NVIDIA offers AI solutions for both public and private sectors and its balance sheet covers over $10 billion in cash on hand.
2. Salesforce (NYSE: CRM)
Salesforce is a software as a service (SaaS) company focused customer relationship management. But it has also pushed forward with AI research and development through its Einstein platform. Einstein allows clients to build AI-powered apps.
The company is led by founder and CEO Marc Benioff. Salesforce has seen revenue growth increase each of the last 4 years and its cash position is currently stronger than ever.
3. Advanced Micro Devices Inc. (NSDQ: AMD)
Advanced Micro Devices is a chief NVIDIA’s competitor in the processor market. NVIDIA steals most of the headlines but AMD’s research into deep learning and machine intelligence is equally impressive.
The company’s Radeon Instinct series is an open ecosystem for machine intelligence that seeks to build faster and more efficient data centers.
AMD is run by CEO and President Dr. Lisa Su and employs over 11,000 people in Santa Clara, California. It features a low debt load — under $700 million in total debt with a $1.38 billion cash balance.
4. Baidu Inc. (NYSE: BIDU)
Baidu is a Chinese internet search company that employs nearly 37,000 people in Beijing. Baidu has been a force in AI development and filed over 5,700 AI patents in China during 2019 alone.
ERNIE is an example of a patented product. It’s a pretraining framework that utilizes deep learning technology to operate a multitude of tasks.
Baidu also has the Baidu Brain — an open-source AI ecosystem used by more than 1 million developers. Co-founder and CEO Robin Li Yanhong has run the company since its 2000 inception. He’s turned the company into the 1st Chinese firm to be listed in the NASDAQ 100.
5. ARK Autonomous Technology and Robotics ETF (BATS: ARKQ)
Picking winners in the AI space can be daunting. Why not go with an ETF that covers the entire sector?
The ARK Autonomous Technology and Robotics ETF (BATS: ARKQ) has 36 different holdings from all over the world. The largest holding is Tesla, but ARKQ’s top 5 is rounded out by Proto Labs, 2U Inc., Stratasys and Xilinx Inc.
Over 84% of the holdings are U.S.-based firms. Other countries represented include China, Japan, Belgium, Israel and Taiwan.
More than 58,000 shares are traded daily on average. The fund contains over $200 million in assets, so liquidity won’t be an issue. The expense ratio is high, but the mix of companies in this ETF is a variation you won’t find elsewhere.
Biggest Artificial Intelligence Movers of the Day
AI stocks tend to be clustered into the tech sector so volatility can be high on certain days. Here are the biggest winners and losers in the AI space today.
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Investing in Intelligent Machines
AI research may look scary in the movies, but the companies on this list aren’t looking to take over the world with an army of robots — at least not yet.
The goal of companies like NVIDIA and Salesforce is to make human lives easier. AI can improve search function, organize businesses and turn complex processes into simple decisions. AI could allow humankind the best of both worlds — the creativity of the human brain with the precision and speed of a computer.