Investors seeking the top AI companies to invest in right now should look at NVIDIA, Amazon, and Microsoft. Here’s why this is the case:
You might have heard that NVIDIA is a top graphics processing unit company that has made a lot of money from the gaming sector.
The company is a huge gaming leader, with revenue from GPUs increasing 67% in the recent quarter, making up 50% of the firm’s top line for the quarter.
But the company is also a leading AI player. The company makes use of its GPUs to aid data centers, which are more and more focused on ai. Nvidia’s GPUs help data centers to go through information like image recognition, allowing for greater cloud-based AI services.
The company’s data center sales increased 97% in Q4, and now make up 38% of the firm’s total revenue. That is impressive, especially since only two years ago data center sales were just 30% of NVIDIA’s revenue.
And then there is the company’s purchase of Arm Holdings, which is still pending. The company says it will use its AI expertise and Arm’s CPUs to “form a company perfectly positioned for the age of AI,” according to CEO Jensen Huang.
The deal has not ended yet and still faces a few roadblocks, but even if it doesn’t go through, NVIDIA’s AI opportunity is still enough to keep the company growing and make it appear on this list.
Amazon is doing much more in the AI space than you might first realize.
For starters, the company has experimented with AI in its Amazon Go and Fresh stores, which utilize image recognition to track what customers are picking up — and what they walk away with — and then automatically charge their cards for it.
And then there are Amazon’s Echo speakers, which use voice-recognition assistant, Alexa. The virtual assistant is getting so popular that it’s now inside many third-party devices and is among the leading smart virtual assistants.
But what really puts the company near the top for AI is its leadership in the cloud market. Its Amazon Web Services (AWS) aids companies in creating chatbots, using video and image analysis, performing text-to-speech, forecasting demand, and a lot more.
AWS has 32% of the cloud market, and it is one of Amazon’s top sectors. The firm earned $4.2 billion in operating income from AWS in 2021’s Q1, higher than its $3.5 billion income from its e-commerce business in North America.
For a top AI play, look no further than Amazon.
Don’t underestimate Microsoft’s growing stature in the AI industry.
Microsoft’s Azure is the second cloud service behind AWS, and is growing thanks to the greater demand for cloud-based AI. Azure’s growth over the past three years has made Microsoft a large AI player — and so will its latest purchase.
Microsoft announced last month that it was buying Nuance Communications for $20 billion. The company creates voice recognition and healthcare AI, including patient engagement and voice transcription. Microsoft says the company will fit well into its Intelligent Cloud business. Nuance’s AI services — like its Dragon speech application — are used by firms globally, and its AI healthcare tech is used by 77% of American hospitals.
By buying Nuance, Microsoft has almost doubled its addressable market in healthcare to $500 billion, and given themselves even better AI tools.
If you are looking for an established company with a foothold in AI, Microsoft is exactly what you are looking for.