The sheer dominance of technology in our lives this year has directed investors’ attention towards machine learning stocks.
With technological advancements taking place every day, investors have plenty of opportunities for some big gains in the sector. Machine learning has existed since the ‘50s but recent strides in its development have made it a high-growth market.
With the new year upon us, experts predict we are likely to see greater distribution of technology in society. Cloud computing will be in almost every organization by this year as remote work becomes the norm.
Investors looking to tap into this “touchless society” will find these stocks a good investment.
Machine Learning Stocks: Microsoft (MSFT)
The pandemic accelerated the growth of cloud computing as organizations made the shift to a remote work environment.
Evidence suggests that this contactless economy is here to stay long after the pandemic. Microsoft, a major player in the cloud computing space is set to benefit from the penetration in machine learning tools.
While Microsoft is known for its e-commerce platform, nearly two-thirds of its business is made up of cloud productivity tools. This includes Teams, Microsoft 365, Dynamics 365 and its cloud platform, Azure. These services are a major reason for the company’s strong bottom line.
In the first quarter of 2021, Microsoft’s cloud revenue increased by 31% year-over-year to $15.2 billion. The Azure platform currently ranks second in the market after Amazon Web Services.
In addition to developing its cloud infrastructure, Microsoft is also making its mark in AI. In 2019, it invested $1 billion in OpenAI which produces artificial intelligence technology. Other investments in GitHub, Lobe and CyberX also adds to its AI capabilities.
Microsoft’s competitive market position and cloud-centric business model, make this machine-learning stock a worthy investment.
Amazon (AMZN)
Amazon is a leader in the world of e-commerce but is making some major strides in the cloud computing space as well.
The company’s AWS (Amazon Web Services) platform holds a majority market share at 33%. This is a result of increased growth in cloud technology during the pandemic which is doing wonders for its stock price. In its previous quarter, AWS reported revenue at $11.6 billion, a 29% increase from 2019.
In addition to its cloud computing business, Amazon also offers a wide array of artificial intelligence tools. This technology helps the company develop goods and services for its customers and is also integrated into its operating systems.
The smart assistant Alexa and the Amazon Go grocery are examples of its AI capabilities in play. The company’s CEO, Jeff Bezos supports machine learning stating that its impact will “quietly but meaningfully improve core operations.”
An investment in Amazon stock is a no-brainer, given its potential for growth in the cloud computing space. Investors looking for a high-growth play will find this machine learning stock a great buy.
DocuSign (DOCU)
DocuSign is best known for its e-signature service which allows users to handle electronic agreements across devices. This product played a key role in 2020’s as organizations went remote.
The company controls 70% of the market for e-signatures while its competitors hold less than 6%. This puts DocuSign in a great position to benefit from developments in this space.
While its e-signature service is proven to be very successful, the company is spearheading its digital transformation with cloud solutions. The DocuSign Agreement Cloud enables users to sign agreements due to DocuSign across a number of devices.
This is amplified by the Seal system. The analytics system can run through a large number of legal contracts at a rapid speed. It can also help identify risks and challenges while providing insights on how they can be resolved. This helps improve the efficiency of signing deals.
DocuSign’s e-signature product caters perfectly to the era of social distancing but its cloud offering is the real game-changer. The company reported some solid results in its previous quarter with sales of $383 million. DocuSign is now looking towards further international expansion where revenue spiked by 77% for the period.
With a lot of upside ahead, an investment in this machine learning stock is a good bet right now.
On the date of publication, Divya Premkumar did not have (either directly or indirectly) any positions in any of the securities mentioned in this article.
Divya Premkumar has a finance degree from the University of Houston, Texas. She is a financial writer and analyst who has written stories on various financial topics from investing to personal finance. Divya has been writing for InvestorPlace since 2020.
