The modern era is uniquely marked by the constant communication taking place between the human and a machine. It has certainly taken an effortless natural way, all through the technologies of Artificial Intelligence (AI). Yet, it is an abstract idea for some for making an investment in the sector. This may be due to the fact that the sector is yet to realize a real pure-play in terms of stocks. In 2016, the Tractica stated that the AI had a market worth of $644 million. However, with constant tapping of the potentiality of the artificial intelligence by some handful of the companies, the sector is expected to attain a rapid growth and reach to a worth of $46 billion in the coming three years.
The growth in this sector is mainly spurred by the technology-based companies such as Apple (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT), Alphabet (NASDAQ:GOOG), Facebook (NASDAQ:FB), IBM (NASDAQ:IBM), Tesla (NASDAQ:TSLA), NVIDIA Corporation (NASDAQ:NVDA), Amazon.com (NASDAQ:AMZN), Alibaba Group (NASDAQ:BABA), Salesforce.com (NASDAQ:CRM), PayPal (NASDAQ:PYPL), Netflix (NASDAQ:NFLX) and Palo Alto Networks (NASDAQ:PANW). These companies utilized their own unique artificial intelligence tool that enables functionality such as voice or photo recognition and speech generation. Tesla and Google are training their autonomous vehicle using Big Data. NVIDIA is on its way to create Supercomputers like Drive PX 2. However, these are not the only companies and abilities of artificial intelligence that has been tapped so far. In fact, the artificial intelligence has umbrella-ed a number of industries like automobile, education, customer service and healthcare. In these industries, artificial intelligence has led to the use of robots and automation in the almost daily routine of the industries. Apart from these, this technology has taken a significant entry into the world of finance.
The Stock Market Revolutionizer
Recently, the artificial intelligence-powered exchange-traded fund was launched by EquBot, in the name of “AI Powered Equity ETF”. This has been done with the pursuit of developing the perfect portfolio having 30 to 70 stocks. With the help of IBM ‘s Watson supercomputing technology, ETF analyzes almost 6000 listed companies and orders them according to the probability of benefiting from the economic situations and trends. The complete process from data fetching to idea generation and portfolio building, every bit is automated and utilizes artificial intelligence. This has taken over the place of the portfolio manager in the given investment scenario.
The Investing Strategy
Artificial Intelligence is thus ensuring a promising future by making such great strides in each and every sector. It surely encompasses the potential and ability to reshuffle the orders all across the industries. Thus, to be competitive and within the market, it has really become important to invest in the AI. Those who invest by means of stocks have to accept the fact that investment before being beneficial may take a time. However, the return can be ensured through a safer zone. To have maximum risk-adjusted returns on the investment in the AI the investor can choose “picks and shovels” Strategy. That will involve complete scrutiny of the company profile and future prospects.
Last but not the least, it is always useful to determine the industry of investment first. The artificial intelligence can be applied to almost all the industries thus it will be beneficial to invest in those which have a unique and large database as AI success lies in data, as unique and large the database will be the more successful its implementation will be.