How to invest in artificial intelligence | Stocks and ETFs


Learn how to invest in the growing market for artificial intelligence, which is projected to reach a value of nearly $ 1 trillion by 2028.

Artificial intelligence (AI) has been considered by some as the fourth industrial revolution, with many industries and countries investing heavily in the technology.

According to Grand View Research, it is estimated that there will be massive growth in AI revenue over the next several years, reaching nearly $ 1 trillion in 2028, up from $ 93.53 billion in 2021.

In the meantime, a report The McKinsey Global Institute predicts that the potential value of artificial intelligence could reach $ 13 trillion annually by 2030. With a vast majority of companies across nine business functions in 19 industries making investments, artificial intelligence has the potential for more than 400 use cases and applications, such as regression analysis, statistical inference, clustering, and recurrent neural networks.

With that in mind, here Investing News Network offers a comprehensive view of artificial intelligence, with an overview of how investors can enter this ever-growing sector to help better answer the question of what investing in artificial intelligence is. .

What is artificial intelligence?

AI is defined as human intelligence exhibited by machines. TO NVIDIA report (NASDAQ:NVDA) states that AI is transforming the world and that its origins date back to the post-WWII era.

The company credits the development of open source frameworks for creating a revolution backed by the development of graphics processing units with faster and more powerful chips to support machine learning and deep learning.

While “narrow AI” is currently in play, the natural progression is towards “general AI”, which in concept is a machine that has human senses and does things the way humans do.

AI and machine learning are often intertwined. Eric Schmidt, President of Alphabet (NASDAQ:GOOG), has explained the difference between these two aspects of the fourth industrial revolution.

Schmidt has said that machine learning is “how the system looks at complex data sets” and learns from the data, while AI is how the data is expressed.

Additionally, Schmidt has noted that the terms are used interchangeably, pointing to Google’s Google Photos and Google Translate products as examples of AI at play.

“We think of it as human-like intelligence and experience, but what really happened is that the machine has learned from the patterns,” he said.

The evolution of artificial intelligence

The evolution of AI is proceeding with great speed, as demonstrated by NVIDIA, which only a few years ago unveiled a technique that allows robots to work with humans. It was created using a deep learning-based system that, according to the company’s research team, is the first of its kind.

Deep learning is a subset of machine learning and AI. While machine learning is seen as an approach to achieving artificial intelligence using large amounts of data and coding, deep learning goes one step further.

In this technique, multi-layered artificial neural networks are used to provide state-of-the-art precision in tasks such as: object detection; voice, image and face recognition; and language translation.

Google itself has been pushing artificial intelligence in recent years. At an I / O conference in 2018, the company showed a large number of products that make use of AI. Noteworthy from the conference is a new technology called Google Duplex, which is an evolution of the Google Assistant.

Small startups are also investing in artificial intelligence, with the main area being the global healthcare industry. These health care AI startups are using new techniques to cure or diagnose cancer and are finding new ways to discover drugs.

Outlook for artificial intelligence

According to the Grand View Research report, ongoing research and innovation carried out by tech giants like Google, Apple (NASDAQ:AAPL) and Microsoft (NASDAQ:MSFT) are driving the adoption of artificial intelligence technologies in industries such as automotive, healthcare, retail, finance, and manufacturing. “For example, from autonomous vehicles to critical life-saving medical equipment, AI is being infused into virtually all gadgets and programs,” the report’s authors stated.

The segment with the largest market share is software solutions, accounting for 38 percent of the global artificial intelligence market revenue in 2020. By 2028, the healthcare sector is anticipated to have the leading market share. artificial intelligence.

The report states that North America will largely dominate the space due to high government investment in artificial intelligence, major players, and a strong technical foundation.

In terms of the fastest growing market, the report states that the Asia Pacific region is at the top of the list thanks to improvements in storage capacity, high computing power, and parallel processing. The report indicates that those three areas have been part of why AI has been implemented so rapidly in industries such as automotive and healthcare.

Other market projections come from Research and Markets, suggesting that the AI ​​market is expected to grow at a compound annual growth rate of 32.7 percent between 2020 and 2027 to reach $ 312.4 billion.

Driving that growth will be artificial intelligence solutions like virtual assistants, marketing, search advertising, identity access management, intrusion detection and cybersecurity for the future.

How to invest in artificial intelligence

With such growth potential in the AI ​​market in the coming years, there are a number of ways investors can dive into the sector, including:

Exchange-traded funds (ETFs):

For those who prefer to invest widely rather than a specific company, ETFs are a popular way to do it. Here is a brief description of three AI ETF for the investor’s consideration:

  • Global Theme X of Robotics and Artificial Intelligence (NASDAQ:BOTZ): The fund started on September 12, 2016 and has 37 shares. Its major holdings include NVIDIA, Intuitive Surgical (NASDAQ:ISRG), Keyence (OTC pink:KYCCF, TSE: 6861) and ABB (OTC Pink:ABLZF, SWX: ABBN).
  • ARK Industrial Innovation ETF (NYSEAMERICAN:ARKQ): This fund was started on September 30, 2014 and has 40 shares, being Tesla (NASDAQ:TSLA), Trimble Inc. (NASDAQ:TRMB) and Kratos Defense & Security Solutions (NASDAQ:SOMEBODY).
  • Robo Global Robotics and Automation Index (NASDAQ:STOLE): The Robo Global Robotics and Automation Index started on October 22, 2013 and has 86 positions. Its main holdings include ServiceNow Inc. (NYSE:NOW), Intuitive Surgical, Vocera Communications, Inc. (NYSE:VCRA).

Stocks:

Investors looking to invest money in AI stocks also have several options available.

To help potential AI investors get an idea of ​​the various sectors available to them under the AI ​​umbrella, Investing News Network has put together a series of lists:

These lists of AI companies, of course, provide only a small glimpse into the industry in general, but for those just learning about the AI ​​investment opportunity, they are a good place to start.

With so much growth in the artificial intelligence sector anticipated in the coming years, now may be the time more than ever to jump into this space.

This is an updated version of an article originally published by Investing News Network in 2018.

Do not forget to follow us @ INN_Technology to get real-time news updates!

Securities Disclosure: I, Melissa Pistilli, have no direct investment interest in any of the companies mentioned in this article.

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