4 Tech Stocks to Watch Out for in a Booming AI Market

On Jul 14, Amazon.com, Inc. AMZN launched smart shopping carts that track items and then charge customers for every item they place inside the basket. The move is in a bid to get a hold over the retail grocery industry with Amazon Go and the acquisition of Whole Foods.

Over the past couple of decades, AI has gained significantly and contributed to the robust growth in the tech sector. Today an increasing number of companies are banking on AI to better their products and services. The past couple of months have been all the more crucial for AI, which saw exponential growth as an increasing number of people resorted to technology following the coronavirus outbreak.

Amazon Takes the Lead

The new shopping carts, called Amazon Dash Carts, will track items as shoppers add them and then automatically charge them when they remove the grocery bags, allowing them to skip the checkout line. Amazon says that the carts will detect the actions of customers should they choose to remove something from the cart with its computer vision algorithms and sensor fusion and deduce the cost from the total.

Amazon has been increasingly resorting to AI to strengthen its grocery shopping arm. However, more than anything, the launch of the cart comes amid the ongoing pandemic, which has compelled people to rely more on contactless shopping and delivery. AI has come as savior in these trying times by assisting in everything from shopping to contactless delivery to even helping healthcare workers, who are at risk of contaminating COVID-19 while treating patients.

AI Poised to Grow

Today, nearly 40% businesses use AI to run their daily course. According to a latest report by Data Bridge, the global AI market accounted for $16.14 billion in 2017 and is projected to reach more than $116.4 billion by 2025 at a CAGR of 37.3%. Further, the United States will maintain 41% growth momentum.

The AI field holds secure development prospects, inferable from which, the key players are concentrating on building an incorporated arrangement including equipment and programming. Moreover, to expand their client base, a few merchants have teamed up with wholesalers and end clients for item appropriation. 

Stocks in Focus

Nvidia Corporation NVDA makes chips that power heavy computational and memory requirements of AI, and generates revenues from gaming GPUs. The company has made AI advancements in other markets that include upscaling 1080p videos to 4K resolutions with deep learning and providing AI services for 5G networks and IoT. 

The company’s expected earnings growth rate for the current year is 36.4%. The Zacks Consensus Estimate for current-year earnings has improved 4.2% over the past 60 days.Nvidiacurrently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Amazon.com, Inc. has beenincreasinglyfocusing onAI to boost its grocery business in particularly. From Amazon Echo and Alexa to AI-powered code reviewer to cashier-less stores, AI has been helping Amazon go from strength to strength.

The company’s expected earnings growth rate for the next year is 92.1%. The Zacks Consensus Estimate for current-year earnings has improved 2.1% over the past 60 days. The company carries a Zacks Rank #3.

Zoom Video Communications, Inc. ZM has been benefiting from the work-from-home and online learning wave following the coronavirus pandemic outbreak that forced more and more people to stay home. Zoom uses AI to schedule video meetings and for a host of other things such as organizing attendee details and transcripting details.

The company’s expected earnings growth rate for the current year is more than 100%. The Zacks Consensus Estimate for current-year earnings has improved 193% over the past 60 days. Zoom sports a Zacks Rank #1.

Netflix, Inc. NFLX uses AI to give its users a personalized experience. Tech companies are using AI to sell products and services to millions of customers. Though voice-activated smart home devices trended in the past decade, the usage of smart tech has now been reshaped by many others. Netflix uses AI to personalize Internet TV content for its subscribers.

The company’s expected earnings growth rate for the current year is 55.9%. The Zacks Consensus Estimate for current-year earnings has improved 0.3% over the past 60 days. Netflix currently has a Zacks Rank #3.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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