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Some of the Best AI Stocks to Watch in 2021
There is a wide variety of technology stocks to choose from these days, as companies are using artificial intelligence (AI) to enhance their software and services. If you’re looking to place some of your investments in the boom of artificial intelligence, here are some of the best AI stocks to watch out for in 2021.
November 10, 2020
Advancements of machine learning for buying and selling stocks
From technical indicators to fundamental information, the stock trading process has evolved in a massive way over the years. However, as the world of technology has progressed, we have seen that machine learning can drastically simplify this process. By analyzing large pieces of data, spotting patterns that are relevant, and generating a single output that navigates traders towards a decision based on predicted asset prices, AI has the potential to help ease the trading process as a whole.
As the tech world continues to grow and advance, it’s becoming increasingly clear that artificial intelligence (AI) will continue to play a big role in the industry. Millions of consumers are interacting with AI daily, whether it’s directly or indirectly. This is happening via virtual assistants, facial and emotion recognition technology, gaming platforms, chatbots, mapping applications, and a variety of other software. Here we uncover some AI stocks that might be worth investing in this year and why artificial intelligence stocks show huge promise in the future of technology.
Alphabet (NASDAQ: GOOG and GOOGL)
Alphabet, the parent of Google, has the resources, motivation, and experience to win, which would certainly make it one of the best AI stocks to watch out for in 2021. Google uses AI and deep learning to automate its software business by using relevant search results, speech recognition, self-driving technology, ad pricing, personal assistant software, and much more. In 2019, Google announced that it had achieved "quantum supremacy" with its Sycamore processor. In 200 seconds, this processor solves computation that would have taken the world's fastest supercomputer 10,000 years to achieve.
Baidu, Inc. (NASDAQ: BIDU)
Baidu, a Chinese multinational technology company specializing in internet-related services and products, has recently announced plans to train approximately 5 million people in AI to move toward a smarter economy and society. Baidu has also partnered with a long list of Chinese universities to help it start school programs that are centered around AI, giving students the opportunity to learn more about this booming industry. The history of BIDU’s earnings are impressive all around, with the company consistently surpassing the consensus estimates for the entire year.
International Business Machines Corp. (NYSE: IBM)
International Business Machines Corp., also known as IBM, uses a unique strategy with AI that applies the technology in a way that can augment human intelligence, increase efficiency, and lower costs. For a few decades, IBM has made big moves in AI and has progressed at a fast rate. Now it uses that power and insight to deliver AI-powered assistants for healthcare, business, and finance. In addition, IBM has boasted an impressive dividend yield of 5.6 percent for investors throughout 2020 that analysts expect to grow over the next year.
Micron Technology Inc. (NASDAQ: MU)
Micron Technology is an American producer of computer memory and computer data storage, including dynamic random-access memory, flash memory, and USB flash drives. This has made the Micron Technology hardware essential for AI applications. Its business is based on commodities, namely DRAM and NAND flash memory. Simply stated, NAND flash memory stores data and holds it permanently; DRAM loses the data when power is taken away. So, as demand for its chips to power AI increases, Micron’s profits and stock price could increase, as well.
Nvidia Corp. (NASDAQ: NVDA)
Nvidia is a specialized semiconductor company that has technology, which plays a central role in high-growth areas of tech, such as deep learning solutions. For years, Nvidia has marketed itself to automakers as the go-to solution for unified architecture across software, AV chips, and data centers. Nvidia boasts impressive quarterly performances, strength in its fundamentals, and solid price momentum, plus the continuous improvement of its high-performance GPUs, making it a market leader.
Salesforce (NYSE: CRM)
In 2019, customer relationship management (CRM) software giant Salesforce acquired Bonobo AI, a firm using automated analysis of customer phone calls, texts, and chats to deliver actionable insights. This collaboration fits perfectly with Sales Cloud Einstein, Salesforce's AI-powered software that uses data to identify previously unseen business patterns, predict what marketing copy will perform, and deliver the hottest sales leads. Salesforce, along with a handful of the other current top AI companies in the world, is now at large-cap growth stock.
Splunk (NASDAQ: SPLK)
Splunk specializes in machine learning, which is a specific and incredibly helpful form of AI. This means that Splunk provides artificial intelligence for information technology (IT) operations, enabling organizations to reduce overall costs by automating normal every day IT functions, without having to hire a new IT department. Over the last decade, Splunk’s sales have risen to double digits every year. Even though this up-and-coming company is not yet profitable, it’s expected to explode in the next coming years. As of April 2020, SPLK stock is up roughly 48 percent year to date and has been in an almost-constant uptrend since.
Tencent (OTC: TCEHY)
Formerly the largest social company in the United States and now the largest social company in China, Tencent is China's first tech firm valued at more than $500 billion. The company won the lottery once it acquired WeChat, an app used in China for messaging, payments, ride-hailing, social media, mail, and other functions. WeChat now has more than 1 billion daily users, and this has been vital in testing and improving AI technology. In recent years, TCEHY has recruited several top AI experts, taking the company to the next level.
Twilio (NYSE: TWLO)
As of 2020, the cloud software business Twilio is worth about $27 billion. Twilio makes cloud-based application programming interfaces (APIs) allowing developers to build voice, video, and messaging features into their apps. Twilio's high growth means high multiples. Analysts have stated that they expect profits to compound at 45 percent annually over the next five years.
The market is growing rapidly and largely, meaning that there are plenty of options for investors in AI stocks to choose from. Although picking stocks in an industry of growth can be scary and uncertain, analysts consider Alphabet, Baidu, IBM, Micron, Nvidia, Salesforce, Splunk, Tencent, and Twilio as some of the best AI stocks to watch as these companies currently show great promise as industry leaders.
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