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8 Artificial Intelligence Stocks That Will Make You Feel Like a Smart Investor in 2020

8 Artificial Intelligence Stocks That Will Make You Feel Like a Smart InvestorPosted on Monday, July 6th, 2020 by MarketBeat Staff

In 2018, it was cannabis. In 2019, it was 5G. And yet before either of those trends, artificial intelligence (or AI) was growing relentlessly and undeniably.

Artificial intelligence stems from the simple fact that computers are getting smarter. And they are being designed to process information faster. The words “machine learning” are being used to summarize the creation of algorithms, freed from human programmers, which train themselves on massive data sets. Earlier this year, two separate artificial intelligence “machines” demonstrated the ability to “read” Wikipedia entries and answer questions better than humans did.

But AI is more than a parlor trick. Chances are at some point today, you’ve experienced a benefit of artificial intelligence. You may have gotten to this page because of an internet search. You may have asked Alexa or your Google Assistant to perform a command. You may have voice-activated your Roomba vacuum. You may have used an AI-powered GPS system to get to wherever you’re reading this.

In the future, you may be hailing an autonomous car. A virtual assistant will be able to place calls for you to make appointments. But instead of sounding like a robot, the assistant will sound human, with an understanding of context and nuance. And those are just two applications. There will be more because the possibilities of artificial intelligence are expansive. But they can also be somewhat chilling. Many of the functions that are performed by humans today may be made obsolete by AI. But that’s a subject for another day.

Right now, you want to know how you can profit from this emerging trend.

You’ve come to the right place. In this special presentation, we will take a look at 8 stocks that can help you profit from the artificial intelligence trend.

#1 - Alphabet (NASDAQ:GOOGL)

Alphabet logo

Alphabet (GOOGL)

We’ll start with the biggest fish in the AI pond, Alphabet (NASDAQ: GOOGL). In fact, you can say that Alphabet is betting its entire existence on artificial intelligence. Shares of the tech giant are only up about 8% in 2020. But much of that sluggish performance is from their ad business.

However, even with this “sluggish” performance, GOOGL stock is only about 3% away from surpassing its all-time high. Does anyone doubt that they won’t quickly surpass that mark? Maybe that will have happened by the time you’re reading this.

But AI is at the core of just about everything the company does. Giving you relevant search results, speech recognition, and more are all rooted in artificial intelligence.

Beyond its leadership in AI, there are over one trillion reasons I’m putting Alphabet on the top of this list. That’s my tongue-in-cheek way of saying that Alphabet has a market cap of over one trillion dollars. That gives it the resources and the staying power to absorb competitors in a field that some analysts see as being ripe for consolidation.

About Alphabet
Alphabet Inc, through its subsidiaries, provides online advertising services in the United States and internationally. The company offers performance and brand advertising services. It operates through Google and Other Bets segments. The Google segment includes principal Internet products, such as Ads, Android, Chrome, Commerce, Google Cloud, Google Maps, Google Play, Hardware, Search, and YouTube, as well as technical infrastructure and newer efforts, including Virtual Reality. Read More 

Current Price: $1,498.37
Consensus Rating: Buy
Ratings Breakdown: 40 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $1,663.26 (11.0% Upside)



#2 - Amazon (NASDAQ:AMZN)

Amazon.com logo

Another of the FAANG stocks that would be impossible to ignore is Amazon (NASDAQ: AMZN). While many consumers are well aware of Amazon’s reputation as an e-commerce giant, the company is also one of the leaders in artificial intelligence. The company uses AI as an offering in its high-margin Amazon Web Services (AWS) division.

Using AI, business customers can perform image and video analysis in addition to using virtual assistants and forecasting. In late 2019, the company introduced Amazon Kendra – an enterprise search service that is powered by machine learning. According to Amazon, the service was “generally available” to all AWS customers.

The company is also using AI to help with its core e-commerce business. Applications include planning routes for the company’s hundreds of warehouse robots.

Unlike Alphabet, Amazon is easily outperforming the market. AMZN stock is up an amazing 53% for the year. And there’s no reason to believe the stock won’t continue to outperform.

About Amazon.com
Amazon.com, Inc engages in the retail sale of consumer products and subscriptions in North America and internationally. The company operates through three segments: North America, International, and Amazon Web Services (AWS) segments. It sells merchandise and content purchased for resale from third-party sellers through physical stores and online stores. Read More 

Current Price: $3,167.46
Consensus Rating: Buy
Ratings Breakdown: 45 Buy Ratings, 4 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $3,287.48 (3.8% Upside)



#3 - Microsoft (NASDAQ:MSFT)

Microsoft logo

While not one of the FAANG stocks, Microsoft (NASDAQ: MSFT) has been doing a lot of the heavy lifting for the tech sector. And it’s not just because of its ubiquitous Windows platform. The company has introduced its Microsoft Azure platform which is helping to fulfill the vision of CEO Satya Nadella.

Azure is Microsoft’s cloud platform that allows customers to add AI capabilities to their apps even without machine learning expertise. Beyond Azure, Microsoft also uses AI to power its Microsoft 365 productivity suite, as well as its Bing search engine and the company’s voice assistant, Cortana.

Microsoft has also invested billions of dollars into Elon Musk’s AI venture, OpenAI. And in May, the companies announced a collaborative effort that has created one of the five publicly disclosed supercomputers in the world.

MSFT stock is up nearly 30% in 2020 and unlike Alphabet or Amazon, investors can actually collect a dividend for holding shares of the company. Although the stock currently exceeds its 12-month price target, the company is nearly a unanimous buy among the 36 analysts that cover the stock.

About Microsoft
Microsoft Corporation develops, licenses, and supports software, services, devices, and solutions worldwide. Its company's Productivity and Business Processes segment offers Office 365 commercial products and services, such as Office, Exchange, SharePoint, Skype for Business, Microsoft Teams, and related Client Access Licenses (CALs); Office 365 consumer services, including Skype, Outlook.com, and OneDrive; LinkedIn online professional network; and Dynamics business solutions comprising financial management, enterprise resource planning, customer relationship management, supply chain management, and analytics applications for small and medium businesses, large organizations, and divisions of enterprises. Read More 

Current Price: $212.48
Consensus Rating: Buy
Ratings Breakdown: 32 Buy Ratings, 3 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $213.82 (0.6% Upside)



#4 - Nvidia (NASDAQ:NVDA)

NVIDIA logo

If you haven’t been paying attention, you may have missed that Nvidia (NASDAQ: NVDA) is not the same company that you think it is. Many investors think of Nvidia as the company that makes the graphic processing units (GPUs) that power personal computers. And that makes those computers useful for gamers.

But the same high-powered graphics cards the company is known for are also helping the company move into AI and deep learning applications. In fact, Nvidia posted over $1 billion in revenue from its data center division in the first quarter of 2020. That was a year-over-year gain of over 80%.

Beyond data centers, the company is also partnering with automakers to claim a piece of the autonomous vehicle market.

NVDA stock is up over 60% in 2020 and that is despite the steep selloff that all tech stock suffered in March. The stock is outpacing its current 12-month price target. But with 30 buy ratings and 5 hold ratings out of 39 analysts that offer an opinion on the stock, you shouldn’t be afraid to get in NVDA stock.

About NVIDIA
NVIDIA Corp. engages in the design and manufacture of computer graphics processors, chipsets, and related multimedia software. It operates through the Graphics Processing Unit (GPU) and Tegra Processor segments. The GPU segment comprises of product brands which aims specialized markets including GeForce for gamers; Quadro for designers; Tesla and DGX for AI data scientists and big data researchers; and GRID for cloud-based visual computing users. Read More 

Current Price: $447.98
Consensus Rating: Buy
Ratings Breakdown: 31 Buy Ratings, 5 Hold Ratings, 4 Sell Ratings.
Consensus Price Target: $368.97 (-17.6% Upside)



#5 - Advanced Micro Devices (NASDAQ:AMD)

Advanced Micro Devices logo

Although it may not be as well-known as Nvidia, Advanced Micro Devices (NASDAQ: AMD) deserves consideration in any AI portfolio. The company has noticeably moved into a solid number two position in both the graphic processing unit (GPU) market as well as the central processing unit (CPU) market.

To paraphrase an old advertising slogan, perhaps being number two AMD tries harder. Whatever they’re doing, it seems to work. The company does not have a dedicated AI chip, but they are still a presence in deep learning. The chipmaker is also the exclusive builder on two of the three fastest supercomputing systems that are used by the U.S. government.

Like Alphabet, AMD stock is not getting a lot of love from investors. It’s up just over 6% for the year as of this writing. But that shouldn’t dissuade you. The company continues to make solid gains on its competition and is showing increasing strength in the data center category.

About Advanced Micro Devices
Advanced Micro Devices, Inc operates as a semiconductor company worldwide. The company operates in two segments, Computing and Graphics; and Enterprise, Embedded and Semi-Custom. Its products include x86 microprocessors as an accelerated processing unit (APU), chipsets, discrete and integrated graphics processing units (GPUs), and professional GPUs; and server and embedded processors, and semi-custom System-on-Chip (SoC) products and technology for game consoles. Read More 

Current Price: $84.85
Consensus Rating: Buy
Ratings Breakdown: 21 Buy Ratings, 14 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $70.32 (-17.1% Upside)



#6 - Salesforce (NYSE:CRM)

salesforce.com logo

Salesforce (NYSE: CRM) is best known for its customer relationship management software. The company recently introduced Salesforce Einstein, an AI-powered software that uses data to produce actionable results including identifying previously unseen business patterns, generate sales leads, and to perform predictive analysis on marketing copy,

Salesforce is far from a pure-play AI stock. In fact, the company gets its AI credentials through its acquisitions that help it improve its software-as-a-service (SaaS) products. Recently the company acquired Bonobo AI. This company uses AI to analyze customer phone calls, texts and chats to deliver actionable insights.

CRM stock has shaken off its March selloff and is now up over 16% for the year. Although the stock is within 5% of its 12-month price target, the stock has a consensus buy rating with 38 buy ratings and 2 strong buy ratings among the 44 analysts that issue an opinion on the stock. 

About salesforce.com
salesforce.com, inc. develops enterprise cloud computing solutions with a focus on customer relationship management. The company offers Sales Cloud to store data, monitor leads and progress, forecast opportunities, and gain insights through analytics and relationship intelligence, as well as deliver quotes, contracts, and invoices. Read More 

Current Price: $201.05
Consensus Rating: Buy
Ratings Breakdown: 40 Buy Ratings, 3 Hold Ratings, 1 Sell Ratings.
Consensus Price Target: $200.61 (-0.2% Upside)



#7 - The Trade Desk (NASDAQ:TTD)

Trade Desk logo

The Trade Desk (NASDAQ: TTD) is on the leading edge of what is known as programmatic advertising. Marketers target content providers to attract their ideal consumers and fine-tune their ad spending and measure their return on investment (ROI). It’s a way of measuring ad effectiveness that advertisers have always dreamt of. And it’s powered by the company’s AI engine named Koa.

Without getting too technical, programmatic advertising changes the way an ad is delivered. A company opens up its web page for providers like The Trade Desk to bid on that ad space in real time. Koa analyzes internet data and generates real-time recommendations.

Some analysts are concerned the TTD stock may be a little overheated right now with the stock currently up over 60% after last year’s 120% gain. It is well above its 12-month price target and analysts have a consensus opinion of hold. However, the company is a leader in what is sure to be the future of advertising. It may not be a home run right now, but a few solid doubles never hurt a portfolio.

About Trade Desk
The Trade Desk, Inc, a technology company, provides a self-service omnichannel software platform that enables clients to purchase and manage data-driven digital advertising campaigns in the United States and internationally. The company's platform allows clients to manage integrated advertising campaigns in various advertising channels and formats, including display, video, audio, native and social, and on a multitude of devices, such as computers, mobile devices, and connected TV (CTV). Read More 

Current Price: $493.20
Consensus Rating: Hold
Ratings Breakdown: 5 Buy Ratings, 9 Hold Ratings, 0 Sell Ratings.
Consensus Price Target: $383.79 (-22.2% Upside)



#8 - Netflix (NASDAQ:NFLX)

Netflix logo

Netflix (NASDAQ: NFLX) may seem like an odd entry into this category. But the company has been a coronavirus winner and with many customers now breathlessly waiting for Season 4 of Ozark, it appears rumors of the company’s demise were unfounded.

And of course the company uses AI to make those oh-so-targeted “suggestions” of what to watch next. Its personalized content that provides the curated experience that is extremely popular to its core audience.

But the company is using AI for more than just a parlor trick. They are also using their learnings to decide on where to shoot a movie. This is extremely important for a company like Netflix which has always relied on its original content, but will become even more reliant on it as other companies enter the streaming wars.

NFLX stock is up nearly 45% for the year. While the stock is slightly above its consensus price target, the company just received a higher price target from Canaccord Genuity of $550.

About Netflix
Netflix, Inc provides Internet entertainment services. The company operates in three segments: Domestic streaming, International streaming, and Domestic DVD. It offers TV series, documentaries, and feature films across various genres and languages. The company provides members the ability to receive streaming content through a host of Internet-connected screens, including TVs, digital video players, television set-top boxes, and mobile devices. Read More 

Current Price: $494.73
Consensus Rating: Hold
Ratings Breakdown: 25 Buy Ratings, 12 Hold Ratings, 6 Sell Ratings.
Consensus Price Target: $486.63 (-1.6% Upside)

 

As you’ve noticed, there are very few pure-play artificial intelligence companies. And you have to be careful. Like the cannabis boom of the 1980s, some companies are much more involved with artificial intelligence than others.

Artificial intelligence is not science fiction, its proven science that is propelling many businesses forward. But the opportunity for investors is only beginning. As much as it may seem AI has become a ubiquitous part of our life, it’s really only in the early innings. And just as AI applications will continue to expand, so will the profit potential for this sector. In fact, analysts from Omdia/Tractica project the total market for AI stocks to grow from $10.1 billion in 2018 to $126 billion by 2025.

Just like cannabis stocks, there is bound to be some consolidation in this sector. Investors will be wise to stick with quality stocks like the ones in this presentation. These are the companies that are likely to be around to be part of the present and the future of this exciting, and expanding, industry.

7 Boring Stocks That Are Winners

Some stocks just don’t get much attention during bull markets. They can be too boring for a growth portfolio. But when the market is going through a period of volatility and uncertainty, these tried-and-true performers have a way of making their way back to popularity.

And there are good reasons for this. First, many of these boring stocks pay dividends. This simply means that the company will reward shareholders simply for holding on to its stock. Dividend stocks aren’t designed to make you rich quickly. However they are designed to offer investors an amount of predictability. And we could all use a little bit of that right now.

And predictable stocks can also help investors manage risk. It can be fun to invest in speculative stocks. But they include a risk premium. When these stocks go up (as they sometimes do) they usually have a return that exceeds the broader market. But when they go down (and they usually do) they usually go down more than the broader market.

But “boring” stocks tend to move closer to the broader market. If you want an analogy from current events, these stocks flatten the curve. They won’t soar as high as riskier stocks, but they won’t sink as low either. And right now, preserving capital should be the number one item on every investor’s checklist.

With that in mind, we’ve created this special presentation to highlight 7 conservative stocks that can help investors win this moment in time. Many of them pay dividends; some do not. But they all have solid fundamental reasons to own them now.

View the "7 Boring Stocks That Are Winners" Here.






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