Artificial intelligence is certainly one of the most fascinating technologies in the world today, as this cutting-edge innovation has so many different applications. Whether it’s using machine learning to make companies more efficient, taking advantage of AI to improve consumer finance, or building self-driving vehicles that leverage this disruptive technology, it’s quite evident that AI’s use cases span far and wide across almost any industry.
The global AI market is expected to grow at a compound annual growth rate of 40.2% from 2021 to 2028, which means it’s hard not to be on board with companies involved in the adoption of this intriguing technology. With more and more organizations deciding to implement AI in some way and the global pandemic stimulating market growth of the industry with secular trends, adding shares of businesses at the forefront of AI could really pay off over the next few years.
That’s why we’ve put together a list of 3 artificial intelligence stocks to buy now to help investors make the right choices when adding exposure to this high-upside area of the tech sector. Let’s take a deeper look below.
You’re likely already familiar with Amazon’s (NASDAQ:) e-commerce business, which has transformed the way that people shop and created countless opportunities for third-party sellers to generate income. There’s also plenty for investors to love about how Amazon is using AI in exciting new ways. The company leverages machine learning to improve its customer experience, optimize its logistic speed, and even provide product recommendations by predicting the context of its customers’ search queries.
Amazon also allows other businesses to take advantage of cutting-edge IT infrastructure and AI with Amazon Web Services (AWS), a rapidly growing part of the company’s that saw revenue grow by 37% year-over-year in Q2 to reach $14.81 billion. Even the company’s physical products like Amazon Echo Dot and Alexa devices are utilizing AI, as Alexa is now leveraging acoustic event detection and has the ability to detect specific sounds like a baby crying to automatically play white noise. According to Marketbeat’s consensus price target estimates from analysts, the stock has over 20% of upside at this time, which is yet another reason why the stock stands out as a strong way to gain exposure to this fascinating technology.
2. Upstart Holdings
This company offers the perfect example of how artificial intelligence technology has a chance to disrupt almost any industry. Upstart Holdings has developed a cloud-based artificial intelligence lending platform that is streamlining the entire consumer lending process for both originating and servicing loans. To really grasp the upside of this company’s platform, consider the fact that four in five Americans have never defaulted on a credit product, yet less than half have access to prime credit. Upstart Holdings (NASDAQ:) could change that statistic, as it foregoes simple FICO-based approval models to improve consumers’ access to credit.
Banks and institutional lenders are attracted to the company’s AI platform as it reduces the risks and costs of lending for them, while consumers love how quickly they can get approved for a loan and receive their cash. The company’s system is constantly learning and optimizing in response to daily loan-level repayment and delinquency data, which means its accuracy continues to improve over time. The stock has been a monster after the company’s report that saw Upstart report revenue of $194 million, up 1,018% year-over-year, and is definitely an AI company to add to your shopping list. Keep an eye on the stock during the seasonally weak month of September for possible dip-buying opportunities.
It’s safe to say that one of the most intriguing applications for AI technology is in the automotive industry, and it’s likely only a matter of time before full self-driving vehicles become commonplace on highways and roads around the world. Tesla (NASDAQ:) is at the forefront of this movement, as the electric vehicle company develops and deploys autonomy at scale in vehicles, robots, and more. CEO Elon Musk is a big proponent of AI and recently hosted a promotional Tesla AI Day event to discuss some of the unique ways that the company is looking to leverage the power of this enthralling technology.
Musk discussed details of a custom AI chip called D1 that will be used to improve the machine-learning algorithm behind the company’s self-driving system. This could be the key to perfecting autonomous vehicle technology and is certainly an interesting update to keep track of. Of course, adding shares of Tesla also means betting on renewable energy and owning one of the fastest-growing electric vehicle companies in the world, which is another reason to consider adding the stock to your portfolio.