To Find Artificial Intelligence Stocks to Buy, Think Like Bill Gates

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Artificial intelligence stocks are finding their way into lots of portfolios these day — and, in fact, they were already there. Alphabet (NASDAQ:GOOGL) uses artificial intelligence (AI) to keep a stranglehold on the internet, with the almighty Google search engine. When you’re using its Google Maps to navigate, and it reroutes you because of traffic, that’s AI, too. If you use Netflix (NASDAQ:NFLX), LinkedIn, Zillow (NASDAQ:Z), or any other service that makes personalized recommendations, then you use AI.

But today I’m here to talk about a totally different kind of AI… one that Bill Gates said could be worth 10 Microsofts.

That’s a big claim — considering that Microsoft (NASDAQ:MSFT) is already a $1 trillion company, by market cap — and Bill Gates is one of the smartest people in the world. So, I’m sure he doesn’t say that lightly.

Another of the smartest analysts I know, Cathie Wood of ARK Investments, says Gates is low-balling it! She thinks this variety of AI will “approach $17 billion in market cap” (emphasis mine).

To show you why, let me give you my quick “elevator speech” on AI as I see it…and the specific opportunity that narrows the field of stocks to buy.

The big subset of AI that everyone’s working in now is machine learning. That’s where machines can actually learn from massive amounts of data, without having to be reprogrammed. They do the work themselves. But it takes a lot of work to write each little algorithm that sets this all in motion.

Let me give you an example:

Say you want your AI to be able to identify a cat. It might sound simple. But to do this with machine learning, the scientists would have to choose what’s called classifiers to help determine whether it’s a cat or not. Maybe they go by the shape of the face and ears, the way the eyes look, the way it stands and moves, that sort of thing. Then the scientists hand-code all of those classifiers.

What Bill Gates and Cathie Wood are so excited about is called deep learning. With deep learning, the scientists start by creating a neural network. This is more like how our own, human brains work. The neurons perform their task, pass the baton to the next neurons, and so on until the task is complete.

With deep learning, the AI truly teaches itself what a cat looks like! This is what a Google scientist did a few years ago. He built a neural network, then ran 10 million cat videos through it. This kind of deep learning learns how to identify cats much the way you and I did: by being shown, “This is what a cat looks like.”

The fact that we can now mimic human reasoning like that is incredible. And it really is the future. These days, we’ve thought of lots of ideas for AI…and now deep learning will make them actually possible.

Artificial Intelligence Stocks: Get Ready for the Boom

Deep learning will transform many industries. One I always highlight in my investing services is transportation.

Self-driving cars are the classic example of artificial intelligence and how it will change our daily lives — eventually.

Right now, it’s hard to imagine getting into an autonomous vehicle (AV). But as Mark Zuckerberg of Facebook (NASDAQ:FB) puts it, “If you’re arguing against AI, then you’re arguing against safer cars that aren’t going to have accidents.” After all, an algorithm can’t have road rage, and it’ll never drive poorly because it skipped its morning coffee.

Fully autonomous vehicles will only become a reality on public roads with deep learning. Any driver, human or otherwise, needs to read signs in a split second. With machine learning, you can teach AI to identify a STOP sign, but you’ll need to hand-code the classifiers, and program it to look for the red color, the eight sides, and the letters S-T-O-P. But if a tree branch is laying across it, you can’t be sure this AI will still know to STOP!

If the car is driving itself, you want it to be able to think and react like a human brain. AVs will have to instantly know that they’ve encountered a bike, a person, a street sign, or any other object, and then determine the best action to take.

That is the kind of “brain power” we get with deep learning. And if you’re looking for artificial intelligence stocks to buy, you’ve gotta jump on this trend; it’s incredibly valuable! The chart below from Persistence Market Research shows deep learning increasing nearly 40-fold from this year to 2027.

This estimate is even bigger than the ones we saw from Bill Gates and Cathie Wood. Persistence Market Research expects deep learning’s market value to hit $25 trillion.

To Find Artificial Intelligence Stocks to Buy, Think Like Bill Gates

Any way you slice the numbers, I see the upside in artificial intelligence, and more specifically deep learning, as among the greatest wealth creation opportunities in the next decade. It’s time to start finding the best artificial intelligence stocks to buy.

The AI Company That’s About to Grow 3X

Twilio (NYSE:TWLO) is a stock I’d have to mention in any discussion of AI.

This company is not working with stop signs, or cats — it’s a communications company, which lets you message your friends and associates anywhere in the world through the cloud. Like any company on the cutting-edge of AI, it still has crazy upside. Revenue is projected to triple in the next three years.

My only caveat here is that with a revolutionary trend like AI, you do have to think big…bigger than any one individual stock.

In addition to companies that need game-changing technology, you want to invest in companies that provide the technology.

The Technological Breakthrough That Makes AI Possible

The more AI takes hold to make our lives and businesses run more smoothly and efficiently, the more data will be required, and created. Huge amounts of data. And to process all this data — you need superior hardware. This is the crux of the $1 billion deal between Microsoft and a little-known company called OpenAI.

And all of those devices need to be powered.

That’s why any investor needs to be on the lookout for the next big breakthrough in battery technology. It’s an innovation that will have multi-trillion-dollar economic implications:

Think of a world with self-driving electric cars that have massive ranges. Think of an iPhone that needs charging just once per month. Think of mass adoption of clean solar and wind energy. Think of airplanes that run on batteries. Think of the eventual demise of the oil and gas industry.

This is where we’re headed — but there are some serious limitations to the current technology. Lithium-ion batteries are too bulky, without enough battery life, and with too many safety concerns, not to mention the fact that key materials are in short supply. That’s why I believe the next big battery breakthrough will go down as one of the greatest inventions of the 21st century.

I’ve spent an enormous amount of time studying the battery industry. I can tell you this mega innovation isn’t a matter of “if,” it’s a matter of “when.” Click here for my presentation with the results of my research. That way, you can get in on this trend BEFORE the world catches on.

Matthew McCall is the founder and president of Penn Financial Group, an investment advisory firm, as well as the editor of Investment Opportunities and Early Stage Investor. He has dedicated his career to getting investors into the world’s biggest, most revolutionary trends BEFORE anyone else. The power of being “first” gave Matt’s readers the chance to bank +2,438% in Stamps.com (STMP), +1,523% in Ulta Beauty (ULTA), +1,044% in Tesla (TSLA), +611% in Liquefied Natural Gas Limited (LNGLY), +324% in Bitcoin Services (BTSC), just to name a few. If you’re interested in making triple-digit gains from the world’s biggest investment trends BEFORE anyone else, click here to learn more about Matt McCall and his investments strategy today.


Article printed from InvestorPlace Media, https://investorplace.com/moneywire/2019/08/to-find-artificial-intelligence-stocks-to-buy-think-like-bill-gates/.

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