As businesses continue investing in artificial intelligence and with the increasing applications it is finding in every sector, the trajectory of these lucrative stocks might never come down. If we look back at 2019, which seems like a long time ago already, companies across sectors have started integrating AI and have implemented it in their products and services.
Tech giants like Google, Amazon, Intel, NVIDIA have already been pushing the boundaries of artificial intelligence. This can be seen clearly when we can see that it has been estimated that AI spending will touch nearly $98 billion in 2023 which makes the CAGR for 2018-2023 forecast period 28.4%. Another insight shows that the AI market is expected to reach $208.49 billion by 2025 with a CAGR of 32.6%.
So it won’t take an highly-intelligent bot to recognise that it would be wise to put AI and ML stocks on the watchlist. As we move towards the ‘20s, let’s take a look at some of the hottest and most outstanding AI/ML stocks that you should be following this year.
Since the advent of artificial intelligence and deep learning, the need for faster processes has increased, rather, exploded. NVIDIA generates most of its revenue from video gaming GPUs, but these GPUs are also used to make the deep learning tasks better than CPUs like Xeon processors. Though there was a dip in its stock in 2019, the revenue grew subsequently in the last two quarters with the development of new conversational AI platforms.
The new conversational AI platform boosted the GPU demand from hyper-scale customers, and its application will continue in 2020 with NVIDIA’s rising stock up along with showcasing AI advancements in other markets including its new Shield TV devices, 5G networks, IoT devices and of course better GPUs.
NVIDIA’s investments in other areas have put it on a long-term earnings growth rate of 9.4%. The Zacks consensus mark for 2020 earnings has increased by 4.1% to $5.56 per share over the past two months or so.
Baidu is China’s Google. The reason for its AI stock growth isn’t just because it is China’s largest search engine, but also because of its same interest in AI and other technologies. Baidu’s interest also lies in technologies like cloud, smart speaker, driverless car market etc.
The essence of Baidu’s AI ecosystem is DuerOS, which a voice assistant. DuerOS hit 100 million users in August 2019 and doubled to 200 million in January.
With China’s government relying heavily on Baidu to boost its national AI efforts, the company has a long-term earnings growth rate of 2.3% and the estimated consensus for 2020 earnings improved up to 30% to $8.45 over the past two months.
Well, Google‘s name has to be here, not only because it owns the world’s largest search engine, but also because of its substantial research and investments in artificial intelligence. Naturally, Google will be on every AI stocks watchlist. Google’s massive ecosystem is a data hub or a gold mine for the AI developers. The sheer size of the data is used for its AI services and Google’s AI tools to optimise its search engine. Google formed its ‘Google Brain’ team eight years ago for deep learning AI research. Google has AI-powered encryption tools, image enhancement tools, robotics projects, TensorFlow AI platform and custom chips for machine learning which gets integrated with all these services on an AI platform.
Over the past five years, Google has been showing an annual sales growth of 8.71%.
Box offers cloud management solutions for automation, security, and application development. The company provides clients with advanced AI and ML solutions through its Box Skills solutions program, which includes solutions like structure and extracts insights from information.
The company has a long-term earnings growth rate of 26%.
Fortinet Inc. (FTNT)
This company provides integrated as well as automated cybersecurity solutions that have been booting ML features for its FortiWeb Web Application Firewall. The FortiWeb Web Application Firewall works towards giving you better threat detection using machine learning. Alongside, other products and services are Fortigate and FortiGuard that leverage ML threat detection.
Fortinet has a long-term earnings growth rate of 14% and a Zack Consensus Estimate for earnings for 2020 of 11.5% to $2.71 over the past two months.
Keysight provides electronic design and test instrumentation systems. Keysight’s integrated models make use of ML technologies. The company’s smart water project utilises ML’s deep learning systems to detect contamination.
Keysight’s long-term earnings growth rate of 9.1% and a consensus mark for 2020 improved to 6% to $5.19 over the past 60 days.
SYNA is no-blue chip AI stock of a company named Synaptics which in the designing and marketing is very similar to human interface solutions market such as touch screen controllers, touchpads for notebook computers, sensors for the mobile device.
The company utilises smart edge AI in its services. The company’s audio smart offerings include fully integrated SoCs which have neural network acceleration, a proprietary wake word engine and advanced far-field voice processing. The company’s consensus estimates for full-year earnings has moved to 86.70% higher over the past 90 days.
CVLT is an AI stock from company Commvault which provides data management solutions for high performing data protection, management of information on complex storage networks, universal availability.
This company’s ML algorithms and AI processes can also identify patterns and detect problems from file activity and change rates. This helps when a potential threat or issue is detected and is alerted to the clients.
CVLT has an excellent long term investment with a 1-year forecast of about $51.46 with currents price $45.95.
Micron Technology (MU)
With massive AI systems being excessively used, the demand for digital memory will increase in time as network and demand for internet also rise, which is good news for a company like Micron and individuals who are thinking of investing in Micron AI stock.
Micron is one of three leading producers of DRAM which feeds data to a processor. Along with applications like 5G, there is an expectation of demand for AI and memory demand. Hence there will be subsequent demand for DRAM.
Palo Alto Networks (PANW)
Palo Alto Networks is a company like Fortinet, which provides cybersecurity solutions to a firm.
Palo Alto Networks introduced Cortex which is the industry’s only open and integrated AI-based continuous security platform. Since Palo Alto’s last earnings reports, its shares have added about 5.2% in that time frame outperforming S&P 500. During the first fiscal year 2020, Palo Alto reported earnings of $1.05 per share, which surpassed the Zacks Consensus estimate of $1.03.
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