Artificial Intelligence (AI) is fast becoming the most significant and dominant general purpose technology with its rapid implementation in sectors like healthcare, transportation, agriculture, banking and defense. AI enables machines to learn from experience and perform human-like tasks by mimicking human behavior.
AI to Boost Global Growth
A report by commercial firm McKinsey Global Institute this week said AI could be responsible for an additional 1.2% growth in annual gross domestic product for the next 10 years. AI could contribute more $13 trillion to global economic activity by 2030, as more applications are put to use.
McKinsey Global's study anticipates 70% businesses worldwide will embrace at least one form of artificial intelligence by 2030, whereas a fraction of large companies will fully adopt this platform.
AI could influence the economy through its impact on several activities, such as helping or substituting human labor to complete tasks faster, thus increasing production, speeding up data processing and data flows, expanding range of products and services and generating wealth, the report said.
But as more AI applications are introduced, existing technologies will need to sustain restructuring costs to incorporate the new technology. Employment and consumption will be reduced too, since AI could replace many human roles at the workplace because of its higher capacity to produce and expertise gained through experience in a short span of time.
The report noted that developed countries that are able to establish themselves as leading forces in AI could gain an additional 20-25% in economic benefits than now. Emerging economies, however, could avail only half of that.
How to Ride AI's Growth
As more top technology companies are investing in artificial intelligence, adding their stocks to your portfolio seems prudent right now.
Here we present stocks of a few companies that have significant exposure to AI. These stocks carry a top Zacks Rank, which enhances the chances of market-beating returns.
1. Amazon.com, Inc.AMZN has taken remarkable initiatives to implement artificial intelligence from its business processes, Echo and Alexa, to automated drone delivery services. The company's new cashier-less supermarket, Amazon Go, that opened in Seattle earlier this year is a great example of AI application as well.
Amazon carries a Zacks Rank #1 (Strong Buy) and its shares have gained 74.4% year to date.
2. Microsoft CorporationMSFT started a venture capital fund called M12 (formerly Microsoft Ventures) to invest in artificial intelligence companies that promise a broad spectrum of growth and positive impact on society. The fund has invested in Element AI, an artificial intelligence incubator based in Montreal. Microsoft's Skype has an AI application too, that offers real-time translations by studying the user's speech.
Microsoft carries a Zacks Rank #2 (Buy) and its shares have gained 30.6% year to date.
You can see the complete list of today's Zacks #1 Rank stocks here .
3. Fortinet, Inc.FTNT develops artificial intelligence-based cyber security programs to identify and counter cyber threats. Fortinet's threat detection system is self-evolving. It automatically collects and analyzes data to spot threats and develops defensive methods accordingly.
Fortinet sports a Zacks Rank #1and its shares have gained 97% year to date.
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