Home Trading Stock Picks AI Stocks to invest in: How To Make A Smart Investment

AI Stocks to invest in: How To Make A Smart Investment

Share This On Social

 

The AI Stocks to invest in, span the market regarding their focus and use of AI, but all have one thing in common, they are using advanced algorithms and neural networks to mimic human learning and decision making. The sector is expected to grow at an annualized rate of 52% over the next seven years; opportunity investors should not pass up. Click Here To Go Straight To Our Top Picks

Companies on the list of AI stocks to buy 2018 span the vertical from chip-maker to software developers and end users like Facebook and Google offering a chance for diversification.The Best AI stocks to invest in for 2018  are poised to profit from growth trends without regard to a sector. Read on to learn our top choices and the catalysts driving them.

Those looking for the next Apple, Microsoft or Google should not discount the small and micro-cap players, the next evolution of AI could come from any one of them. We narrow down the list of AI stocks small cap investors want to own.  

Want outstanding performance? You Need Revolutionary AI Stocks To Invest In

Artificial intelligence, AI, is not a new concept but it is the latest buzzword among technology investors. It is, to put it simply, the goal of achieving human-like thinking in a machine. If you don’t think it matters now know this, AI is the future of technology and will soon affect everything we do. In the age of the Internet of Things AI will power everything within our lives from smart-clothing technology to smartwatches that monitor our health, devices that control our homes and cars that drive themselves.

AI Stocks To Invest In: The Internet Of Things

The Internet of Things is expected to grow exponentially over the next few years, and so is AI. There are about 23 billion connected devices right now,  more than 3 for every person on the earth today. That number is expected to grow to 75 billion by 2025, a growth of more than 200%. At the same time the AI sector, the software that powers the IoT, is expected to see a compound annual growth rate of 52%, quite an opportunity for savvy investors.

The IoT and AI already impact our daily lives; Automakers like Tesla are testing self-driving cars, Alexa (Amazon’s trusty home assistance) responds to your every whim, and Facebook delivers ads eerily targeted directly at you, all done with AI. The problem is that most companies who claim to be using AI are just using Big Data and Data Mining. Both Big Data and Data Mining (the collection of large, cumbersome, complex data sets and producing meaningful information) are precursors to true AI, but neither is the real thing.

The two most common types of AI tools are machine learning and deep learning neural networks.Machine learning has long been a goal of computer scientists, it evolved from the study of pattern recognition and gave computers the ability to learn without being programmed to do so. At heart, it is the study of advanced algorithms able overcome static programming instructions by building models and making inferences.

Deep learning is an offshoot of machine learning that uses more advanced algorithms to model high-level abstractions of data sets. In layman’s terms, instead of a simple input of data and output of response, there are multiple processing layers between the two, allowing for higher level analysis from multiple perspectives. It’s how Alexa knows what kind of mood you’re in, and what kind of music it should play for you.

The AI Stocks To Buy For Market Beating Profit

What are AI stocks, exactly, you may ask? They are any stocks involved in the creation, development, use or support of artificial intelligence and span the range of investment sectors. Regardless the sector, AI needs a lot of computing power, and computing power means semiconductors. In this highly specialized market, there is one clear leader, and that is NVIDIA.

AI Stocks To Invest In: Follow The Money To Make More Profits

1)  NVIDIA is the leading manufacturer of chips powering AI, along with those preferred by gamers, cryptocurrency miners, and cloud-computing networks. This is to be differentiated from companies like Intel who have traditionally made chips powering personal computers and more traditional types of computing networks. NVIDIA commands about 18% of the total chip market but a much larger 72.8% of the high-speed GPU market.

The stock has been in a strong uptrend over the past two years, and our analysis says the run is not over. Shares entered correction with the broader market in February with one notable difference. While it did suffer losses, those losses were muted compared to the broad market and tech sector, and have led to new all-time highs since.

A look at the weekly chart brings the technical picture into sharper focus. The market is in a long-term uptrend and offering investors a chance to get in before the next move higher. This move will be driven by the long-term expansion of the IoT as well as AI, with the added benefit of market dominance in key areas.

 

AI stocks to buy 2018

One of the areas of dominance is autonomous vehicles technology although revenue growth has been a bit sluggish compared to expectations. Regardless, the market segment is expected to see an acceleration in calendar 2018, fiscal 2019, as automakers ramp up for the expected 2020 release of mass-market autonomous vehicles.

Other demand concerns are focused on cryptocurrency which is a sizeable portion of revenue, about 10% compared to competitor AMD’s 3%. With many cryptocurrencies moving to proof-of-stake and Ethereum slowly reducing the difficulty of mining it seems certain the sector will see some decline. The silver lining is that expected declines are not enough to overshadow revenues from the fast-evolving AI sector. Regarding earnings, fiscal 2018 revenue grew nearly 41%; EPS grew 83%, net margins grew 1.10%, and all are expected to improve again in the current fiscal year.

Going forward we expect to see this stock consolidate at or near the current trading range during the second quarter of 2018. Then, as earnings and outlook outshine concern, prices will begin to rise and continue rising over the long term. Our 12-month price target is near $280, but our longer-term outlook is more aggressive. With AI and IoT projected to grow the way they are, this stock still should hit $500 by the end of 2019. As a bonus the stock pays a dividend, it’s small at 0.25% but quite safe and fully covered by earnings.

The AI Stocks to buy 2018 will see Robust Demand

What is the outlook for AI stocks? The outlook for AI stocks is robust demand. The math says it all; these companies will have to make more than twice as many chips as already exist to meet the needs of AI and the IoT. Not to mention all the other uses of computing power that exist in the world. It’s not like chips have an infinite lifespan, they get old, they break down, they become obsolete and when talking about chips and the chips needed for AI Intel is always a part of the conversation.

AI Stock To Buy 2018: Don’t Miss Out On This Top Chipmaker

2) Intel – Intel is the world’s leading manufacturer of chips with nearly 68% of market share. The company announced late in 2017 it was releasing a new line of AI chips to rival those of NVIDIA in efforts of maintaining that dominance. So far, the response has been muted, but we think that is due to the timing of the release as chip demand often slows in winter. The family of chips, called the Nervana Neural Network Processor or NNP, is designed to speed up the learning curve associated with deep learning algorithms and expected to see widespread use in data centers and Big Data scenarios.

Over the past two years, Intel has been working hard to develop the team and technology necessary for it to dominate in the AI chip market.The work began in 2016 with the acquisition of Nervana Systems (source of technology for the new AI line of chips) and was followed up with the purchases of Movidius and Mobileye in 2017. Movidius is a company working on low-power processors for deep learning, high power means higher cost, while Mobileye is a company focused on technology for self-driving cars.

The stock has been in an uptrend since breaking out of a trading range mid-2017. Since then it has risen to highs not seen since the tech bubble burst in 2001 and outperformed during the February correction. The stock has not only been able to maintain its all-time high levels during the spring 2018 market correction; it has managed to move up to set new highs as well.

The company recently reported 4th quarter 2017 earnings results, growing revenue 4.3% YoY and beating analysts estimates. While the growth is less spectacular than what was reported by NVIDIA remember that Intel is a much larger business. A 4.3% increase for them equates to double digits for all of their competitors. Data within the report shows growth is predominantly in Data Center, Internet of Things and Programmable Solutions (all AI related)  although the company is seeing growth in all of its segments except one. The one area of weakness is PC-centric computing, but that decline is outstripped by gains in the AI related market segments.

Forward guidance was raised on strength in fiscal 2017 performance and expected demand growth in 2018. Gartner is expecting to see demand grow 7.5% in 2018 with persistent supply shortages leaving the chipmakers like Intel and NVIDIA with plenty of work. Analysts on Wall Street agree, but that is only important because it means added exposure for the sector, new investors and new money to drive the market higher. Sell-side analysts like Baird, Nomura and Raymond James have all issued upgrades for Intel and/or the chip sector in general, and more are expected.

We see this stock moving higher over the long term. It is supported by trend, has a robust outlook and is the market leader. It also pays a sector leading dividend yielding 2.3% when shares are trading near $51. Our twelve-month outlook has the stock trading near $65 with a target between $85 and $100 by the end of 2019.

AI Stocks Small Cap Growth Investors Will Love

Why should I buy AI stocks? Because they are going to see robust growth over the next few years at least. Why should I buy small-cap AI stocks? Because that is where most of the innovation will happen. The large-cap players like Google, Amazon, and Netflix are looking at these companies for the next break through; you should be too. Not all small-cap AI stocks are going to be a homerun, but they are all target for takeover in this rapidly evolving field, the trick is finding the right ones, and that is where we come in.

AI Stocks Small Cap: Applied AI Is The Ticket To Success

History is rife with examples of how science, in the business sense, is meaningless without application. Tesla made great advances in electrical engineering, but he died a poor man. It took the application of those ideas to make money the same way Steve Jobs applied computer theory in a way he, and Apple, could make money. That is why we like VIQ Solutions(VQSLF), they are applying the latest AI technologies to digital security in a way that is revolutionizing the industry.

VIQ Solutions is an innovator in the realm of cyber-security, and more specifically the capture of evidence be it criminal or compliance related. They provide complete, end to end coverage of digitally transmitted information used by courts, law enforcement, and hospitals. The company uses AI in its patent-pending digital evidence capture solution systems to not only record instances of crime or abuse but help prevent them and increase productivity within the organization using them. In today’s world where cybersecurity is the leading risk to an individual’s well being, it is certain there will be no shortage of clientele.

 

AI stocks small cap

What grabbed our attention is the revenue growth. VIQ Solutions has generated an average 40% revenue growth over the first three quarters of its current fiscal year, and that is expected to continue expanding on into the future. Cybercrime is big business and growing at an unprecedented rate. It has been estimated the cost of cyber crime will reach $2 trillion by next year, more than 300% the reported cost in 2016, and a driver for this company’s earnings. Business and industry spent more than $80 billion on the prevention of cybercrime in 2017, and that number is growing as well.

The company operates in the US and Canada with its stock listed on the Toronto Stock Exchange and OTC on the Gray Market in the US. It is a bit of gamble, so we do not recommend it for a large holding. What we do recommend is a small position that can be added to as the company grows and increases in value. We expect to see it listed on the primary market soon when that happens gains will be counted in the hundreds if not thousands of percentage points. For those that don’t know the Gray Market is an unofficial listing of stock before its official release and used as a gauge for demand.  

One Smart Investment You Don’t Want To Miss

AI stocks to invest in, and artificial intelligence stocks etf, are one smart investment. This sector is going to power the world we live in, and it’s growing at an exponential rate. Even artificial intelligence penny stocks are beginning to enter the mainstream markets. While there are other AI stocks to buy now, we are focused on the chipmakers because they are guaranteed to profit from this growth, espcially the AI stocks small cap sector. Without the chipmakers, there is no AI, no IoT and none of the billions of connected devices expected to exist in only a few years. NVIDIA and Intel are the best AI stocks to buy 2018