The Emergence of AI
Artificial Intelligence (AI) has garnered widespread attention from users and investors after the viral rollout of the AI-powered chatbot ChatGPT. To give you an idea of how successful the launch has been, ChatGPT is now the fastest consumer app to reach 100 million active users taking just two months to reach the milestone. As a result of the meteoric rise to popularity, privately held ChatGPT creator OpenAI has secured more than $10 billion in investments from Microsoft MSFT.
Companies like Amazon AMZN have been using AI under the hood for years. For example, Amazon leverages AI on its back end to increase sales on its e-commerce platform (if you add a table to your shopping cart, it will suggest chairs). Microsoft is not the only publicly traded company making bold bets in the AI space to compensate. The emergence of ChatGPT has exhibited not only the power and versatility of AI technology but also the threat to existing tech juggernauts. AI technology may not only disrupt technology, but it is also likely to impact investments. The recent awakening is causing tech giants such as Alphabet GOOGL to take notice but and action. Friday, Alphabet announced an investment of $300 million in AI start-up Anthropic. Meanwhile, International Business Machines IBM has been on a spending spree of its own, attempting to bolster the firms AI presence by acquiring a handful of small AI-centric firms in recent months.
Can AI Move the Needle?
Though the new investments by the dominant tech players are significant from a dollar perspective, they are unlikely to move the needle in the short term for a company like Alphabet, which has a market cap of over $1 trillion, or Microsoft, which has a market cap of nearly $2 trillion.
Because the technological advances in the space are still relatively new and many companies are privately held and small in size, investors are left with little in the way of AI stocks to choose from. Fortunately, there are three public companies that recently IPOed and are pure plays on emerging technology, including:
Story continues
1. C3.ai Inc AI: C3.ai is an enterprise AI software provider that aims to develop, deploy, and operate large-scale AI, predictive analytics, and IoT applications. Since going public, the stocks performance has been dismal. AI traded as high as $180 in its third week of trading in 2020, only to crash to as low as $10 last year.
Zacks Investment Research
Image Source: Zacks Investment Research
However, the recent AI hype, rising revenue, and a narrower than anticipated loss in the companys recent earnings report have driven shares higher and changed the character of the stock. Over the past three months, the stock is up by more than 100% on massive volume. Surprisingly, more shares traded hands last week than the week of the IPO.
Zacks Investment Research
Image Source: Zacks Investment Research
Though C3 has yet to turn a profit as a public company, its revenue has been growing for several quarters, and the company has onboarded some impressive clients including, the U.S. Airforce, utility giant Consolidated Edison Inc ED, and Koch Industries (the second largest privately held company in the United States).
At present, avoid shares of C3 because they are extended in price and hold a lowly Zacks Ranking of 4. Nevertheless, investors should keep an eye on the stock over the coming months. C3 is one of the few AI pure plays available to public investors, and the recent buying pressure in shares suggests that investors are anticipating a turnaround.
2. Veritone Inc VERI: Veritone is a firm that runs a proprietary cloud-based digital asset management platform focused on leveraging AI technology and its benefits to clients in the media, politics, legal, and law enforcement industries. Veritones niche in digital asset management has attracted some noteworthy clients, such as the Los Angeles Chargers football organization. The Chargers have more than 60 years of video content stored. Organizing such a large amount of content can be a headache and requires several employees and a lot of money. That is until they took advantage of Veritones platform. Veritones solution organizes, stores, and makes the content searchable, like Google.
Like C3, Veritone has taken investors on a rollercoaster ride since coming public in 2017. With that said, the stock has been on the rebound and has garnered the attention of investors in recent weeks.
Zacks Investment Research
Image Source: Zacks Investment Research
Veritone has only produced one profitable quarter since going public. That said, top-line growth has been strong VERI has consistently achieved mid to high double-digit revenue growth since going public.
3. Bigbear AI Holdings BBAI: Bigbear.ai is a provider of artificial intelligence, machine learning, cloud-based analytics, and cyber engineering solutions. Through AI, Bigbear aims to provide its clients with a clearer view of their current data, better predictability of future outcomes, and pathways to navigate changing conditions. Like Veritone and C3, BBAI gets its revenue from various industries, including government (intelligence analysis), healthcare, and manufacturing. BBAI shares have gone on an impressive run over the past few weeks rocketing from a low of $0.58 to a high of around $6. However, the company is tiny, unprofitable, and holds a poor Zacks rating of 4.
Zacks Investment Research
Image Source: Zacks Investment Research
Takeaway
For now, the current AI craze loosely echoes blockchain mania from a few years ago. During this period, any company with blockchain in its name rocketed higher as the speculative juices began to flow on Wall Street. In 2017, Long Island Iced Tea Corp switched its branding to Long Blockchain Corp to benefit from the hype. Ultimately current earnings power and future earnings runway began to matter again in the blockchain stocks, and I suspect the same will happen in AIrelated stocks. The likely scenario in the stocks mentioned above is that they have benefitted from hype, small floats, and speculation in recent weeks.
Nevertheless, it never hurts to begin researching a novel, innovative industry such as AI. For pure plays, patience is required. Secondary beneficiaries such as Nvidia NVDA and Advanced Micro Devices AMD currently have more favorable reward-to-risk profiles.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Advanced Micro Devices, Inc. (AMD) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
International Business Machines Corporation (IBM) : Free Stock Analysis Report
Consolidated Edison Inc (ED) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
C3.ai, Inc. (AI) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Veritone, Inc. (VERI) : Free Stock Analysis Report
BigBear.ai Holdings, Inc. (BBAI) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Read the original post:
AI Mania: 3 Rare Pure Plays to Monitor - finance.yahoo.com
- Chinese national arrested and charged with stealing AI trade secrets from Google - NPR - March 8th, 2024 [March 8th, 2024]
- President Biden Calls for Ban on AI Voice Impersonations During State of the Union - Variety - March 8th, 2024 [March 8th, 2024]
- Revolutionize Your Business with AWS Generative AI Competency Partners | Amazon Web Services - AWS Blog - March 8th, 2024 [March 8th, 2024]
- Broadcom Expects AI Demand to Help Offset Weakness Elsewhere - Yahoo Finance - March 8th, 2024 [March 8th, 2024]
- Micron Hits Record High With Analysts Calling It an 'Under-Appreciated AI Beneficiary' - Investopedia - March 8th, 2024 [March 8th, 2024]
- The Adams administration quietly hired its first AI czar. Who is he? - City & State New York - March 8th, 2024 [March 8th, 2024]
- AI likely to increase energy use and accelerate climate misinformation report - The Guardian - March 8th, 2024 [March 8th, 2024]
- This Artificial Intelligence (AI) Stock Could Double, and It Is Way Cheaper Than Nvidia - Yahoo Finance - March 8th, 2024 [March 8th, 2024]
- Fake images made to show Trump with Black supporters highlight concerns around AI and elections - The Associated Press - March 8th, 2024 [March 8th, 2024]
- Artificial intelligence and illusions of understanding in scientific research - Nature.com - March 8th, 2024 [March 8th, 2024]
- Analysis | House AI task force leaders take long view on regulating the tools - The Washington Post - March 8th, 2024 [March 8th, 2024]
- Don't Give Your Business Data to AI Companies - Dark Reading - March 8th, 2024 [March 8th, 2024]
- NIST, the lab at the center of Bidens AI safety push, is decaying - The Washington Post - March 8th, 2024 [March 8th, 2024]
- Essay | AI is Coming! Tips for Staying Calm and Carrying On - The Wall Street Journal - March 8th, 2024 [March 8th, 2024]
- AI can be easily used to make fake election photos - report - BBC.com - March 8th, 2024 [March 8th, 2024]
- 5 Artificial Intelligence (AI) Stocks That Could Make You a Millionaire - Yahoo Finance - March 8th, 2024 [March 8th, 2024]
- AI could be an extraordinary force for good. So why do our politicians still not have a plan? - The Guardian - March 8th, 2024 [March 8th, 2024]
- Mapping Disease Trajectories from Birth to Death with AI - Neuroscience News - March 8th, 2024 [March 8th, 2024]
- India plans 10,000-GPU sovereign AI supercomputer - The Register - March 8th, 2024 [March 8th, 2024]
- SAP enhances Datasphere and SAC for AI-driven transformation - CIO - March 8th, 2024 [March 8th, 2024]
- Jim Cramer names companies and sectors poised to rally on the AI wave - CNBC - March 8th, 2024 [March 8th, 2024]
- The job applicants shut out by AI: The interviewer sounded like Siri - The Guardian - March 8th, 2024 [March 8th, 2024]
- Microsoft confirms Surface and Windows AI event for March 21st - The Verge - March 8th, 2024 [March 8th, 2024]
- Adobes new Express app brings Firefly AI tools to iOS and Android - The Verge - March 8th, 2024 [March 8th, 2024]
- A Google AI Watched 30,000 Hours of Video GamesNow It Makes Its Own - Singularity Hub - March 8th, 2024 [March 8th, 2024]
- Palantir CEO Karp on TITAN, AI Warfare Technology - Bloomberg - March 8th, 2024 [March 8th, 2024]
- Elliptic Curve Murmurations Found With AI Take Flight - Quanta Magazine - March 8th, 2024 [March 8th, 2024]
- 5 AI Stocks to Buy in March 2024, According to Analysts - TipRanks.com - TipRanks - March 8th, 2024 [March 8th, 2024]
- Wix's new AI chatbot builds websites in seconds based on prompts - The Verge - March 8th, 2024 [March 8th, 2024]
- Amid record high energy demand, America is running out of electricity - The Washington Post - March 8th, 2024 [March 8th, 2024]
- AI Crypto Tokens in 5 Minutes: What to Know and Where to Start - Inc. - February 26th, 2024 [February 26th, 2024]
- 'The Worlds I See' by AI visionary Fei-Fei Li '99 selected as Princeton Pre-read - Princeton University - February 26th, 2024 [February 26th, 2024]
- AI is having a 1995 moment, analyst says - Business Insider - February 26th, 2024 [February 26th, 2024]
- Vatican research group's book outlines AI's 'brave new world' - National Catholic Reporter - February 26th, 2024 [February 26th, 2024]
- Honor's Magic 6 Pro launches internationally with AI-powered eye tracking on the way - The Verge - February 26th, 2024 [February 26th, 2024]
- Google explains Gemini's embarrassing AI pictures of diverse Nazis - The Verge - February 26th, 2024 [February 26th, 2024]
- Google cut a deal with Reddit for AI training data - The Verge - February 26th, 2024 [February 26th, 2024]
- What's the point of Elon Musk's AI company? - The Verge - February 26th, 2024 [February 26th, 2024]
- AI agents like Rabbit aim to book your vacation and order your Uber - NPR - February 26th, 2024 [February 26th, 2024]
- Announcing Microsofts open automation framework to red team generative AI Systems - Microsoft - February 26th, 2024 [February 26th, 2024]
- After Nvidia's latest blowout, here are 20 AI stocks expected to rise as much as 44% - Yahoo Finance - February 26th, 2024 [February 26th, 2024]
- 1 Exceptional AI Chip Stock Investors Need to Know About in 2024 - The Motley Fool - February 26th, 2024 [February 26th, 2024]
- Nvidia briefly hits $2 trillion valuation as AI frenzy grips Wall Street - Reuters - February 26th, 2024 [February 26th, 2024]
- AI Chatbots Can Guess Your Personal Information From What You ... - WIRED - October 18th, 2023 [October 18th, 2023]
- Harvard IT Launches Pilot of AI Sandbox to Enable Walled-Off Use ... - Harvard Crimson - October 18th, 2023 [October 18th, 2023]
- Advancing policing through AI: Insights from the global law ... - Police News - October 18th, 2023 [October 18th, 2023]
- Hochul announces new SUNY, IBM investments in AI - Olean Times Herald - October 18th, 2023 [October 18th, 2023]
- Nvidia's banking on TensorRT to expand its generative AI dominance - The Verge - October 18th, 2023 [October 18th, 2023]
- AI expands from MRFs to vehicles - Plastics Recycling Update - October 18th, 2023 [October 18th, 2023]
- AI Reads Ancient Scroll Charred by Mount Vesuvius in Tech First - Scientific American - October 18th, 2023 [October 18th, 2023]
- A DEEPer (squared) dive into AI Harvard Gazette - Harvard Gazette - October 18th, 2023 [October 18th, 2023]
- Florida bar weighs whether lawyers using AI need client consent - Reuters - October 18th, 2023 [October 18th, 2023]
- Cognizant and Vianai Systems Announce Strategic Partnership to ... - PR Newswire - October 18th, 2023 [October 18th, 2023]
- How AI could speed up scientific discoveries, from proteins to ... - NPR - October 18th, 2023 [October 18th, 2023]
- AI challenge to deliver better healthcare | Western Australian ... - Government of Western Australia - October 18th, 2023 [October 18th, 2023]
- Henry Kissinger: The Path to AI Arms Control - Foreign Affairs Magazine - October 18th, 2023 [October 18th, 2023]
- Stability AI releases StableStudio in latest push for open-source AI - The Verge - May 18th, 2023 [May 18th, 2023]
- Google CEO Sundar Pichai Predicts That This Profession Will Be ... - The Motley Fool - May 18th, 2023 [May 18th, 2023]
- Frances privacy watchdog eyes protection against data scraping in AI action plan - TechCrunch - May 18th, 2023 [May 18th, 2023]
- Investing in Hippocratic AI - Andreessen Horowitz - May 18th, 2023 [May 18th, 2023]
- As Alphabet flexes its AI prowess, there's a 'new elephant in the room' for Google - MarketWatch - May 18th, 2023 [May 18th, 2023]
- The Boring Future of Generative AI | WIRED - WIRED - May 18th, 2023 [May 18th, 2023]
- OpenAI readies new open-source AI model, The Information reports - Reuters.com - May 18th, 2023 [May 18th, 2023]
- What every CEO should know about generative AI - McKinsey - May 18th, 2023 [May 18th, 2023]
- AI creates images of the 'perfect' man and woman - Sky News - May 18th, 2023 [May 18th, 2023]
- Audit AI search tools now, before they skew research - Nature.com - May 18th, 2023 [May 18th, 2023]
- 3 Reasons C3.ai Stock Could Be Your Golden Ticket to the AI ... - InvestorPlace - May 18th, 2023 [May 18th, 2023]
- Zoom makes a big bet on AI with investment in Anthropic - VentureBeat - May 18th, 2023 [May 18th, 2023]
- AI voice phone scams are on the rise. Here's how to avoid them - USA TODAY - May 18th, 2023 [May 18th, 2023]
- Amazon is building an AI-powered conversational experience for ... - The Verge - May 18th, 2023 [May 18th, 2023]
- AI speculators need to 'differentiate between actual spending and investment' and hype: Strategist - Yahoo Finance - May 18th, 2023 [May 18th, 2023]
- AI Can Be Both Accurate and Transparent - HBR.org Daily - May 18th, 2023 [May 18th, 2023]
- You're Probably Underestimating AI Chatbots | WIRED - WIRED - May 18th, 2023 [May 18th, 2023]
- AI presents political peril for 2024 with threat to mislead voters - The Associated Press - May 18th, 2023 [May 18th, 2023]
- We need AI to help us face the challenges of the future - The Guardian - May 18th, 2023 [May 18th, 2023]
- End Of Googles Dominance? Stock Gets Rare Analyst Downgrade Over AI Fears - Forbes - May 18th, 2023 [May 18th, 2023]
- Watch 44 million atoms simulated using AI and a supercomputer - New Scientist - May 18th, 2023 [May 18th, 2023]
- AI Is The New Electricity: Bank Of America Picks 20 Stocks To Cash In On ChatGPT Hype - Forbes - March 2nd, 2023 [March 2nd, 2023]
- Tech Giants Are Barreling Headfirst Into an AI Arms Race - February 20th, 2023 [February 20th, 2023]
- Bing's AI Is Threatening Users. That's No Laughing Matter - TIME - February 20th, 2023 [February 20th, 2023]