Zacks Investment Ideas feature highlights: Microsoft, Nvidia, Alphabet, Mobileye and Intuitive Surgical
For Immediate Release
Chicago, IL – January 26, 2023 – Today, Zacks Investment Ideas feature highlights Microsoft MSFT, Nvidia NVDA, Alphabet GOOGL, Mobileye MBLY and Intuitive Surgical ISRG
The Coming AI Revolution: 5 Companies at the Forefront
Artificial Intelligence, also known as AI, describes the technology that uses computers to mimic human knowledge and learning. While AI has been a well-known buzzword for years, the rollout of ChatGPT has catapulted it to the mainstream. ChatGPT (stands for Generative Pre-Trained Transformer) is an AI-powered chatbot that was launched in November 2022 by OpenAI – a company co-founded by some of Silicon Valley's most prominent names such as Reid Hoffman (LinkedIn founder), Elon Musk and Peter Thiel.
Though ChatGPT is still merely a prototype, users are flocking to the tool due to its surprisingly deep knowledge across many areas and its in-depth responses to queries. Just how powerful is ChatGPT? The bot has passed the medical license, MBA operations, and bar exams – and it will only improve from here.
Today we will cover 5 companies at the forefront of the AI revolution:
Microsoft: In 2019, Microsoft backed ChatGPT creator OpenAI with $1 billion in funding. After the hugely successful launch of the ChatGPT prototype, Microsoft announced earlier this week that the software giant would invest another $10 billion over the next ten years.
Meanwhile, ChatGPT is converting from a free service to a "freemium" service. The tool is available for free to all. However, premium users can enjoy more rapid response speeds and availability when the bot's demand is high for $42 per month.
Microsoft's Azure is the primary cloud service provider for ChatGPT. Last night during MSFT's EPS call CEO Satya Nadella confirmed the company's commitment to AI by saying, "We are committed to help customers use our platforms and tools to do more with less today and innovate for the future in the new era of AI." Shares rose 5% initially.
Nvidia: Though AI has been in use for years, it has only recently exploded in popularity because the masses are using it. What was holding AI back before? AI platforms such as ChatGPT require immense computing power to process intricate computing tasks. Nvidia is the leader in PC graphic processors, and its technologies are already being used in several AI realms, such as high-performance computing and virtual reality platforms. Nvidia competitorsalso stand to benefit.
Alphabet: Google parent Alphabet is currently the biggest user of AI in its many businesses. Alphabet utilizes AI to:
· Optimize its search engine Google.
· Moderate content that violates policies on its YouTube video platform.
· Spearhead its autonomous driving division Waymo.
· Turn image data into actionable insights in its robotics company Boston Dynamics.
The best option for investors looking for a pure play on AI and autonomous driving would be Mobileye. Mobileye is a leader in the autonomous driving space and supplies its technologies to a wide array of automakers. Mobileye and Tesla should continue to lead in this space as demand grows due to the drastic increase in distracted driving deaths. Several months ago, Tesla CEO Elon Musk hinted that Tesla would soon look to manufacture a futuristic "Robotaxi," which will be arideshare service that can operate without a human driver.
Intuitive Surgical: Like driving, there are many realms that AI proponents believe will be better handled by machine rather than man. One such area is minimally invasive surgery – a medical practice where precision is paramount. Intuitive Surgical is best known for its successful "da Vinci" robotic surgical system which costs $2 million. Currently, surgeons control the device from a console away from the patient and can complete a variety of complex procedures. However, the company is using AI to collect and curate data to lead to better patient outcomes in the future.
In the long run, stocks are driven by higher earnings, and higher earnings are driven by innovation. Think back to some of the biggest winning stocks over the past few decades.
For this reason, investors need to begin tracking the AI space. Though the space is in its infancy and the use cases have only scratched the surface, investors should expect an influx of investment dollars following the recent success of ChatGPT and more game-changing technology to be unveiled in the coming years. While few public pure plays exist now, in the future, investors should expect new companies to come public and existing companies to derive more and more revenue from this groundbreaking industry.
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Microsoft Corporation (MSFT) : Free Stock Analysis Report
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Mobileye Global Inc. (MBLY) : Free Stock Analysis Report
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