As artificial intelligence (AI) continues to gain traction, it’s no surprise that its involvement has lifted shares of companies, big and small, across industries. Wall Street’s fascination with AI has become more targeted, and companies that specialize in AI technology could be the biggest winners. Let’s take a closer look at some of the potential winners in the AI industry and how their stocks are performing.
C3.ai Inc. rises with prominent customers such as Shell, Baker Hughes, and the U.S. Air Force
C3.ai Inc., a software company that develops AI applications for multiple sectors, has seen its stock rise significantly this year. The company has prominent customers such as Shell, Baker Hughes, and the U.S Airforce. C3.ai is touting the ability of its “generative AI” technology to integrate with AI technology from OpenAI and Google.
Microsoft Corp.’s Azure cloud business expected to gain share
Microsoft Corp. is one of the popular names to come up when discussing the impact of AI on the stock market. Microsoft’s Azure cloud business is expected to gain share this year as practically all OpenAI and related volumes will happen on Azure. Microsoft is integrating AI with Bing search engine and throughout the Azure cloud computing platform, making it an attractive investment for those interested in the rise of AI.
Chip giant Nvidia Corp. benefits from specialized AI chips
Chip giant Nvidia Corp. is also a beneficiary of the AI boom, with its specialized AI chip accounting for the majority of the high-end AI market. The company’s shares have risen substantially over the past years due to continuous growth in demand for hardware required for neural networks.
Risks concerning too much steam too quickly in the AI industry
The AI revolution is expected to transform many other companies and industries in the future. However, some regulators and technologists are concerned that the AI craze is generating too much steam too quickly. The rapid pace of AI development could bring significant disruption to the global economy, especially when it comes to jobs in certain sectors such as office and administrative support work and legal tasks.
AI revolution and its impact on developed world economies
Goldman Sachs chief economist Jan Hatzius predicts that nearly half of legal and office support functions could be automated using generative AI applications. Goldman Sachs sees 25% of all labor in Europe and North America as subject to automation, with two-thirds of all jobs being partially affected. Certain occupations are more at risk than others, such as office and administrative support work, legal tasks, and architectural and engineering work. AI has the potential for massive labor disruption, but it can also provide substantial economic growth benefits to global GDP.
Investing in the rise of AI
Cathie Wood leads Ark Investment Management, which focuses on investing in future-oriented technologies. Ark Invest packages shares in companies developing innovative technologies into exchange-traded funds for everyday investors. Ark Invest predicts that AI will add $200 trillion to global economic output by 2030, which could lead to explosive growth for the remainder of the decade.
The cost to train generative AI models could decline by 70% per year between now and 2030, making AI-powered tools more accessible. Revenue opportunities for companies developing AI software could top $14 trillion per year by the end of the decade.
Lemonade uses AI to disrupt the insurance industry and is one of the stocks related to AI that could deliver substantial upside for investors. Splunk, a specialist in machine learning, is providing all the tools for businesses to benefit from technology. Upstart is attempting to revolutionize how banks assess potential borrowers by using AI to determine creditworthiness, saving institutions a substantial amount of time and money in the long run.
In conclusion, the AI revolution is bringing significant changes to the stock market, with companies specializing in AI technology being the biggest winners. However, caution must be exercised to ensure that the rapid growth of AI does not bring significant disruption to the global economy. Nevertheless, the economic growth benefits to global GDP and revenue opportunities for AI companies make investing in this industry an attractive proposition.
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