Artificial Intelligence: Industry Characteristics & How to Choose the Right Company
Artificial intelligence is still one of the most attractive fields for investing. Although it seems as if we have heard about it for ages, there is a huge potential both for the industry and investors. According to Mike Chen of PanAgora Asset Management, “It’s not man versus machine. It’s a man plus machine.” Let’s learn more about the AI industry and how you can put your money in it.
Industry-Wide Artificial Intelligence
It’s impossible to count how many companies use artificial intelligence. You interact with artificial intelligence daily. It may happen directly and indirectly. For example, when you use virtual assistants, chatbots, try to find a way to a location, or even play games.
Most of the enterprises apply AI to develop processes. In general, AI is used to reduce the number of errors, build efficiency, and improve the convenience of their services.
Artificial Intelligence in Investing
Firms use artificial intelligence to analyze data more efficiently. If we’re talking about financial companies, they develop artificial intelligence investing software to improve the analysis of market conditions and securities. AI helps make precise investment decisions. Thus, it leads to more accurate predictions.
Artificial Intelligence in Healthcare
How can you make medicine more efficient? It’s worth using AI. Artificial intelligence can contribute to controlling of well-being. It allows analyzing a patient’s history and increase the accuracy of diagnoses.
AI helps professionals in healthcare understand human conditions and provide support for staying healthy. Moreover, the technology can be used to submit complex feedback and guidance.
Artificial Intelligence in Marketing
Artificial intelligence can be even used in marketing. Marketing aims to evaluate the interest of customers and predict their future steps. AI uses customer data and machine learning to forecast consumer behavior. Such predictions help companies to improve their customer experience.
Artificial Intelligence vs. Machine Learning
These are not opposite concepts. Machine learning is a part of artificial intelligence. The main difference is that AI represents systems that create smart results in plenty of circumstances. Machine learning relates to systems that can draw conclusions from experience and adapt.
What to Know Before Investing in AI
Of course, artificial intelligence creates outstanding opportunities for investors. More and more companies have been implementing AI in their processes to improve their efficiency. Nevertheless, it’s crucial to know about factors that may affect your investment decisions.
You won’t find an industry without a risk. However, if we consider AI risks, we should highlight two points. If the company plans to solve several problems with AI, it’s more likely that the risks of losses will be higher. At the same time, if a firm focuses on a specific sphere, risks will reduce.
This happens because a focus on a specific area increases the possibility of more significant results. A company makes a more reliable product, so its returns rise, and the value of shares moves up. To deal with risks, investors should apply risk management rules or deal with professionals at Einvestment.
As we mentioned above, artificial intelligence is used in plenty of spheres. Thus, you should choose one that will suit your aims. There are significant differences if you invest in the medical field or manufacturing.
As soon as you determine which industry suits you the most, you need to check the main points that will determine the result of your investing:
- Learn the current industry conditions
- Analyze the industry’s potential
- Evaluate how securities behaved before
What Stocks to Consider
We can set up three types of stocks you can choose from to invest. The first set is artificial intelligence technology companies- for instance, Google, Facebook, and Amazon. Such firms have proved they have much data that can be used in artificial intelligence. These companies are already interacting with customers through AI equipment.
The second type is companies that don’t have outstanding data yet and even may have limited experience. Nevertheless, they are eager to implement AI technologies. It can be either those that provide cloud-based applications or even startups.
The third set is companies that help other firms to accumulate a lot of data. ETFs can be used as an excellent example.
We gathered a list of companies that can bring the highest profit in the artificial intelligence industry in 2020:
- Nvidia Corp.
- Alphabet (Google)
- Microsoft Corp.
In conclusion, artificial intelligence is one of the leading tech developments that may bring high profits. Experts predict a continuous development of AI in different industries- from medicine to manufacturing. However, you need to consider several points that may affect your investments.
First, it’s vital to choose the industry you want to invest in. Second, regardless of the industry, you need to consider risks that a company may bear due to its AI strategy.
It can be complicated to determine who will outperform in artificial intelligence. If you don’t want to deal with plenty of analysis, you should apply for a consultation with Einvestment professionals.