The buzz was there for years that artificial intelligence was the next big thing. As usual when it comes to technology innovation, the opening salvos from private equity and others took quite a while to catch up with reality. That all changed last year with the introduction of OpenAI’s ChatGPT, and then the company offered expanded access to OpenAI’s DALL-E 2 AI image and art generator.
With almost unlimited potential and possibilities for machine learning, smart applications and appliances, autonomous vehicles and robotic applications, the brave new world is here now. Numerous companies stand to benefit from the technological advances that AI will provide, and those that do not use the technology in the coming years will surely regret it.
As usual, mega-cap technology companies are likely to benefit first as they have been embracing the onslaught of AI applications for years, and they have the deep pockets to go get and/or make deals with the companies that are providing breakthrough technologies like OpenAi, C3.ai and others.
We screened our 24/7 Wall St. technology and AI research universe looking for the companies likely to benefit near term. Five big companies made the cut, and almost all of them have been hit hard and are still at the most outstanding entry points in years. While all are rated Buy, it is important to remember that no single analyst report should be used as a sole basis for any buying or selling decision.
Alphabet
There should be no surprise that the Google parent and search giant is all-in on the AI revolution. Alphabet Inc. (NASDAQ: GOOGL) provides various products and platforms in North America, Europe, the Middle East, Latin America and elsewhere.
Its Google Services segment offers products and services, including ads, Android, Chrome, hardware, Gmail, Google Drive, Google Maps, Google Photos, Google Play, Search and YouTube. It is also involved in the sale of apps and in-app purchases and digital content in the Google Play store, as well as Fitbit wearable devices, Google Nest home products, Pixel phones and other devices, and in the provision of YouTube non-advertising services.
The Google Cloud segment offers infrastructure, platform and other services; Google Workspace that includes cloud-based collaboration tools for enterprises, such as Gmail, Docs, Drive, Calendar and Meet; and other services for enterprise customers. The Other Bets segment sells health technology and internet services.
Alphabet reported is using AI applications in almost all the firm’s central business silos, from ad pricing to content to spam filters. It is also the parent company for software subsidiary DeepMind and autonomous vehicle company Waymo.
Jefferies has a $150 price target on Alphabet stock. That is well above the $130.44 consensus target and Wednesday’s closing print of $122.63.
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