Artificial intelligence (AI) has taken the world by storm. Burly robots and humanoids are common in sci-fi but it would not be too ambitious to say that the human race may see a cyborg infiltration down the line.
With the emergence of AI, various sectors such as defense, medical and aerospace are increasingly making use of the technology to boost productivity and cost-effectiveness. This is why investing in AI-related stocks is a prudent decision at this point.
AI to Improve Defense and Police Surveillance
An area which is already experiencing a massive usage of machine learning and robotics is the defense sector. Drew Cukor, chief of the U.S. Department of Defense’s (DoD) Algorithmic Warfare Cross-Function Team stated on Mar 6, 2018 that the near future is about to observe humans and computers working “symbiotically” in order to increase the efficacy of a weapon system to be able to detect a target and obliterate it.
The whole purpose of such a shift is to primarily increase the output by one single worker. In fact, experts hope that a single analyst would be able to produce three times the original output with the use of machine learning.
Such systems are being increasingly deployed by the U.S. military. One of these is the use of Alphabet Inc’s (NASDAQ:GOOGL) Google artificial intelligence technologies in a drone project named Maven. The project which was established in July 2017 uses Google’s TensorFlow AI technology coupled with machine learning APIs to analyze the humungous amount of footage shot by U.S. drones.
Coming to law enforcement, many tech hotshots are working in close liaison with police departments to enhance services using AI. There has been a rise in efforts to deploy machine learning APIs to improve video surveillance and body cameras to enable them to identify faces in real time in a bid to expand the reach of city surveillance.
Come fall and the body-camera related technology should be ready to use. The New York Police Department in particular already uses facial recognition using the surveillance footage but only after the crime has occurred. The technology is under development and would revolutionize the whole facial recognition experience for the police.
Legislation to Scrutinize Advances in AI
Chair of the House Armed Services Subcommittee on Emerging Threats and Capabilities, Republican Elise Stefanik, proposed a bill on artificial intelligence on Mar 21, 2018, in a bid to get the legislation added to the current year’s defense policy bill.
The legislation aims to review and scrutinize the advancements in AI through a commission that would be established. Further, the bill also seeks to recognize the country’s dependence on AI, revolutionize warfare and prepare the United States for any possible threat from such technologies.
Efforts have also been made by the United States to counter China’s advances in AI as the country’s law-makers fear that China is poised to end America’s dominance in AI.
To tackle any situation, the United States aims to adopt a government-led initiative for boosting AI, particularly in the military space. Moreover, Defense Secretary James Mattis has time and again emphasized Pentagon’s plans to foster investments related to AI over the next few years.
Machine Intelligence to Counter High Healthcare Costs
According to Deloitte, global health care spending is expected to rise at an annual rate of 4.1% in 2018-2021. Interestingly, the increase comes not from high prices of medical devices and pharmaceuticals but due to a rise in labor costs particularly an increase in the salaries of healthcare employees. AI can help curtail such high costs.
Application of AI in various aspects of healthcare would be a shot in the arm for productivity. It has been noted that firms which deployed AI, experienced reduction in healthcare costs by as much as 50%. The same companies also reported improvement in patient outcome by nearly 60%.
Most importantly, as the population of the elderly increases in society, there will be a need for improved healthcare infrastructure which should also be cost-effective. By 2050, the 65 or above age group is projected to be 83.7 million. Such a scenario would lead to a steep rise in healthcare costs and AI can improve patient outcome as well as reduce costs associated with it.
Buy These 3 Stocks
Artificial intelligence is about to revolutionize the world as we know it. With its various applications in almost all the spheres of life, AI would soon become a household term. The technology has found widespread usage in defense, medical as well as industrial procedures to boost productivity and reduce costs.
Given such positives, it would be wise to invest in these three stocks of companies involved in the development and extensive usage of AI. Adding AI-related stocks to your portfolio looks like a smart option at this point. However, picking the winning stocks may be difficult.
For this, we have taken the help of the Zacks Stock Screener to make our selection foolproof. Further, these stocks carry a Zacks Rank #1 (Strong Buy) and flaunt a market cap of more than $100 billion.
Stocks to Gain From the Artificial Intelligence Wave: NVIDIA Corporation (NVDA)
NVIDIA Corporation’s (NASDAQ:NVDA) sustained efforts toward attaining robust position in several emerging industries such as AI, deep learning and driverless cars industry has paved way for it future growth.
NVIDIA has gained 16.5% year to date, outperforming the 7.4% rally of the industry it belongs to. The Zacks Consensus Estimate for the current year has improved by 31.9% over the last 60 days.
Stocks to Gain From the Artificial Intelligence Wave: Amazon.com, Inc. (AMZN)
Amazon.com, Inc.’s (NASDAQ:AMZN) Alexa powered Echo devices have boosted sales across different products and services. The AI-driven Alexa has already been integrated into a host of everyday devices for the digital home, which has converted the nascent smart home market into a potential area of growth in a very short time.
AMZN has gained 19% year to date, outperforming the 10% rally of the industry it belongs to. The Zacks Consensus Estimate for the current year has improved 1.8% over the last 90 days.
Stocks to Gain From the Artificial Intelligence Wave: Micron Technology, Inc. (MU)
Micron Technology, Inc. (NASDAQ:MU) has been eyeing the self-driving car industry. It seeks to combine the self-driving car industry with high-end memory solution that it began shipping last year.
MU has gained 25.3% year to date, in line with its industry’s performance. The Zacks Consensus Estimate for the current year has improved 11.8% over the last 60 days.
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