The COVID-19 pandemic has given employers ample reasons to look for ways to substitute man with machine. The shift in trend toward automation has accelerated in the past year. And why not? Businesses were suffering huge losses due to the lockdowns, leading to decline in productivity. Artificial intelligence (AI) tools that were perceived to give a competitive edge or a ‘nice-to-have’ technology prior to 2020 became essential for several companies across the globe to stay afloat.
All the more, AI has been deployed by several organizations during the pandemic to provide information to the public, when physical interactions were a complete no-no. AI assisted in routine checkup in hospitals and helped in abiding safety protocols. Several AI tools, which were earlier only deployed in test runs in research labs, have now entered the commercial market and are well accepted. But, will the AI rule continue in the post-pandemic world?
‘As-a-service’ Models and Technology Shifts
Last year, employers had to focus on how to survive both during the pandemic and determine their fate in the new normal world or the post-pandemic era. The pandemic accelerated not only technological but also societal shifts. Adoption of trends like work-from-home, online retail, curbside pickup, entertainment-as-a-service and telemedicine accelerated and created deep behavioral shifts. Majority of these trends rely heavily on AI and machine learning to gather information, analyze and solve problems.
‘As-a-service’ models are key to automation technologies, from chatbots, automated tele-calling, voice assistants, or the industrialized robotic environment, especially collaborative robots (aka cobots). These as-a-service models can address shifts, be it data, infrastructure, platform, or experience. Per a ReportLinker report, the global AI as-a-Service market was valued at $2.68 billion in 2019, and is expected to reach $28.58 billion by 2025, registering a CAGR of 48.9% between 2020 and 2025, which marks a nearly five times jump . Further, the pandemic will be fueling growth in this space. Companies like Thomson Reuters plan to invest $500 million to $600 million in AI and machine learning to get data faster for professional customers.
The consistent shift to multi-cloud functioning and growing need for cloud-based intelligence services have also boosted demand for AI as-a-service. In fact, multi-cloud management platform has witnessed increase in demand last year from various industries such as financial services, distribution, manufacturing and government. Per a report by IBM, about 98% of companies plan to adopt multi-cloud infrastructure by 2021, while only 38% have procedures and tools to operate in this multi-cloud environment.
Looking at the bigger picture, given the pandemic push, 80% of healthcare is now delivered as telemedicine in the United States, while all education, from pre-K to post-graduate has shifted online. From work to shopping, entertainment and education, everything has gone through a digital transformation at warp speed in the one-year period. The foundation of a successful shift relies on AI and Internet heavily. In the post-pandemic era, as-a-service models will continue to power several industries. AI caters to planning for future uncertainties, advanced analytics to make business decisions according to societal shift, detect and account for behavior changes and predict the effects of policies.
5 Winning AI Stocks
The growing infrastructure and accessibility of AI will allow transformation across various industries and this will boost demand for companies that pioneer in AI and related technology. Here are five stocks that are poised to grow as AI continues to reign in the post-pandemic world. All the stocks mentioned below holds a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Dynatrace, Inc. DT provides a software intelligence platform for the enterprise cloud applications. The company’s expected earnings growth rate for the current year is 96.8% compared with the Zacks Computers – IT Services industry’s projected earnings growth of 6%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 8.9% upward over the past 60 days.
NVIDIA Corporation NVDA operates as a visual computing company. NVIDIA DGX systems are designed to give data scientists powerful tools for AI exploration that goes from office desk, to data center, and the cloud. The company’s expected earnings growth rate for the current year is 33.7% compared with the Zacks Semiconductor – General industry’s projected earnings growth of 15.6%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 15.1% upward over the past 60 days.
Apple Inc. AAPL designs, manufactures, and markets smartphones, personal computers, tablets, wearables and accessories. The company that belongs to the Zacks Computer – Mini computers industry has an expected earnings growth rate of 36.6% for the current year. The Zacks Consensus Estimate for its current-year earnings has been revised 11.2% upward over the past 60 days. Apple offers Siri, an AI-based voice assistant, that leans on machine learning, and on-device intelligence for the functioning of smart recommendations. This tech giant offers several other AI-based services for home and office.
Cerence Inc. CRNC provides AI-powered assistants and innovations for connected and autonomous vehicles. The company’s expected earnings growth rate for the current year is 23.8% compared with the Zacks Computers – IT Services industry’s projected earnings growth of 6%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 7.8% upward over the past 60 days.
Microsoft Corporation MSFT develops, licenses and supports software, services, devices, and solutions. Microsoft AI platform is a robust framework for developing AI solutions in conversational AI, machine learning, data sciences, robotics, IoT and more. The company’s expected earnings growth rate for the current year is nearly 28% compared with the Zacks Computer – Software industry’s projected earnings growth of 4.5%. The Zacks Consensus Estimate for this company’s current-year earnings has been revised 9.5% upward over the past 60 days.
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