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Why IT giants are investing in artificial intelligence
21.09.2021

Freedom Finance told why the largest foreign companies are investing in artificial intelligence.


Eldar Shakenov Analyst noted that Alphabet, Microsoft, Facebook and Amazon spend a lot of money on these technologies. These giants are embedding AI in consumer products and services.


Global AI revenues, including software, hardware, and services, will grow 16.4% year over year in 2021 to $ 327.5 billion, according to the latest report from IDC leading market research firm. The market is expected to surpass the $ 500 billion mark by 2024 with a five-year CAGR of 17.5% and total revenues to reach an impressive $ 554.3 billion. Given these prospects, it will be possible to consider adding to the investment portfolio the following shares of technology giants that are actively using artificial intelligence technologies, "Shakenov said.


The analyst has listed major companies that are investing billions of dollars in artificial intelligence.


Nvidia is easily ranked among the top AI stocks as the high-performance chip maker is a regular supplier of specialized semiconductors. The company announced the purchase of British chip maker Arm Holdings for $ 40 billion last year. Now plans to build an artificial intelligence lab in Cambridge with the world's fastest AI supercomputer, Leonardo, which also uses Nvidia GPUs to power it.


Gartner research firm predicts that the global AI semiconductor market will grow to more than $ 70 billion by 2025, up from $ 23 billion in 2020. Analysts expect the battle for AI chips for data center applications to intensify and Nvidia could gain significant market share as a leading provider of AI chips for cloud computing and other applications.


With a target price of $ 230 from investment banks, NVDA shares have an upside potential of about 18%.


Apple Inc, being the most valuable public company in the world, has the funds to invest in the technology of the future. In fact, it has $ 204 billion in cash, so it should come as no surprise that the company is using significant resources to expand its AI commitment.


The company has upside potential to the average investment bank target price of $ 165.9, about 10% upside.


Alphabet, the parent company of Google, is a great example of a large, roughly $ 1.8 trillion company that uses AI every day to improve its operations and drive profitability. Alphabet's autonomous vehicle subsidiary, Waymo, has been a leading player in the self-driving car market since its inception in 2009. Its fortune exceeds $ 30 billion. Google's leadership in quantum computers that can replace traditional computing and dramatically accelerate technological progress in the future is another advantage of GOOGL as one of the best AI stocks.


The company has upside potential to the average investment bank target price of $ 3,138, about 15% upside.


Amazon.com, Inc. Artificial intelligence has been an area of focus for the company for years, and the results can be seen on Amazon Alexa, one of the leading speech recognition products. At its virtual conference: Invent, Amazon Web Services (AWS) said it has the broadest and most comprehensive set of machine learning capabilities among cloud service providers. AWS also introduced the new Trainium machine learning learning chip. Clients include corporate America influencers such as Netflix (NFLX), Verizon Communications (VZ) and many more.


The company has upside potential to the average target price of investment banks at $ 4,150, about 28% upside.


Microsoft Corporation. The Microsoft Azure cloud service is the foundation for AI-driven tools for medicine, language, robotics, medical imaging, and more. The $ 1 billion investment in OpenAI, founded by Elon Musk in 2019, aims to create General Artificial Intelligence (AGI), a technology that can do everything that human intelligence can. Thanks to its investment, Microsoft will become OpenAI's preferred partner for commercialization if AGI is achieved, potentially generating good returns for Microsoft.


The company has upside potential to the average investment bank target price of $ 329, about 12% upside.


Facebook deeply committed to machine intelligence. Since January 2018, the company has Jerome Pesenti, a legend in the field who is known to have led the IBM Watson division and its AI team. Automating self-learning algorithms to improve Facebook's newsfeed algorithm, which has 2.85 billion monthly active users, is a key factor in Facebook's success, and using AI to test hate speech and fake news is very important to the company and society. Facebook is using artificial intelligence to link e-commerce more closely with Instagram, planning to roll out visual search that allows users to click on images to shop for similar items. Facebook's Open Loop initiative to lead smart regulation of technology and AI is also creating some potential for self-service.


The company has upside potential to the average investment bank target price of $ 410, about 14% upside.


Link to source  https://lsm.kz/investicii-gigantov