Machine learning has become one of the hottest industries for tech companies and consequently, a huge area of focus for many investors.
Because machine learning has so much potential in such a wide range of industries, traders would be wise to look for stocks to buy within the trend. With most big-name tech firms at least dabbling in machine learning somehow, there are several choices for those interested in adding it to their portfolio.
However, it’s important to invest in companies whose machine-learning efforts are setting them up for success as the technology develops.
The following are three companies that are setting themselves up to be leaders in the machine-learning space.
Stocks to Buy to Win Big on Machine Learning: International Business Machines Corp. (IBM)
International Business Machines Corp. (IBM) is perhaps one of the most obvious stocks to buy for investors interested in machine learning.
The company’s super-computer, Watson, has been touted as one of the most promising machine-learning ventures. The computer is able to sift through volumes of data in order to identify patterns and learn from past inputs, making it a valuable asset for several industries.
Healthcare is one place Watson has excelled, by helping doctors to diagnose patients and make connections between symptoms and diseases.
While the healthcare space represents a lucrative market for IBM’s machine-learning technology, cybersecurity could be the biggest reason to invest in IBM. This fall, IBM’s Watson team is slated to begin a yearlong research project in which the computer will learn to detect security risks by analyzing data to find patterns. Given that cybersecurity is a rapidly growing field, Watson’s involvement could prove pivotal as the industry advances.
Watson’s future prospects are a major reason IBM is one of the best stocks to buy to get in on the machine-learning trend, but the super computer’s current work portfolio is also impressive.
IBM said that companies in over 45 countries, across 20 different industries, have enlisted Watson’s services to date, and those figures are expected to continue growing as its capabilities expand.
Stocks to Buy to Win Big on Machine Learning: Alphabet Inc (GOOG)
Alphabet Inc (GOOG, GOOGL) is another big name that’s worth considering when it comes to machine learning.
As is the case with most tech trends, GOOG has been quietly working with machine learning for years. The firm uses the technology for things like its speech recognition technology, and even its web search function.
However, what makes GOOG an interesting machine-learning play is the company’s latest effort to become a one-stop shop for users via a comprehensive virtual assistant and messenger service called Google assistant.
The service will attempt to take the company’s search service a step further by directly answering users’ questions rather than directing them to other websites. The service will take everything into account from user preferences to location data to provide a customized experience.
The new messaging service will similarly notice users’ typical behaviors in order to anticipate what they might say and provide pre-written responses that don’t sound generic. The service will also make use of chat bots, or automated chat functions that do things like book tickets, make reservations and answer questions without the need for a human.
GOOG is a bit late to the personal assistant party, as companies like Facebook Inc (FB) Amazon.com, Inc. (AMZN) and Apple Inc. (AAPL) have had services like these available to the public for quite some time. However, that doesn’t mean that GOOG’s service won’t be well received.
Virtual assistants overseeing how people interact with the web are likely to explode in the coming years as machine learning develops, so owning a company like GOOG that is likely to succeed in this space is a smart play.
Stocks to Buy to Win Big on Machine Learning: Nvidia Corporation (NVDA)
While both GOOG and IBM are developing machine-learning technology themselves, another smart stock to buy is Nvidia Corporation (NVDA), which supports the technology with its graphics processing units.
Although the majority of NVDA’s GPU sales are for video games, and it has done well in this space, NVDA has recently branched out into other areas like machine learning.
Companies like Facebook are already using NVDA GPUs in their machine-learning computers because of their superior speed, which allows computers to learn in a matter of hours rather than days. This is an important factor for tech firms looking to apply their machine-learning technology to a variety of industries.
NVDA is a smart play for those who see the machine-learning trend continuing to advance, but the company’s GPUs have other applications as well. They can also be used to establish networks for data centers and support cloud computing systems.
Since the cloud computing market is another rapidly expanding industry, NVDA looks like an even more attractive play.
As of this writing, Laura Hoy did not hold a position in any of the aforementioned securities.
