The Zacks Analyst Blog Highlights: Amazon, Apple, Google, Microsoft and NVIDIA

Zacks Equity Research
·8-min read

For Immediate Release

Chicago, IL – April 8, 2021 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include: Amazon.com, Inc. AMZN, Apple Inc. AAPL, Alphabet Inc. GOOGL, Microsoft Corporation MSFT and NVIDIA Corporation NVDA.

Here are highlights from Wednesday’s Analyst Blog:

4 Must-Buy A.I. Stocks on Pandemic-Triggered Automation

The coronavirus crisis induced an environment of strong digital transformation. In fact, major breakthroughs in cloud computing, predictive analysis, deep learning, machine learning, natural language processing (NLP) and Internet-of-Things (IoT) have been paving the way for a massive AI boom in 2021.

From automation to delivering personalized recommendations and chatbots, leading to higher customer satisfaction, AI is becoming indispensable.

These developments in AI are leading to robust achievements in futuristic technology, including the training of advanced driver assisted systems (ADAS) in self-driving vehicles, increased AR/VR utilization across enterprise, healthcare, and entertainment, edge computing, blockchain, and even advanced warfare devices.

The companies are leveraging AI to design robust applications, which are revolutionizing broader working trends of various domains, including supply-chain optimization, customer care services, smart home automation, logistics, transportation, security, utility, financial services and banking, robotics, and agriculture.

In fact, per IDC data, spending on AI systems is expected to grow beyond $110 billion in 2024 from $50.1 billion estimated in 2020, at a CAGR of 20.1% between 2019 and 2024.

Moreover, Gartner cites “Smarter, more responsible, scalable AI” in its report titled “Data and Analytics Trends for 2021” at the foremost. It is necessary for AI in the hyperautomation era to enable better learning algorithms, easily interpretable systems in a shorter time, while being ethical and more scalable.

A.I. Here to Stay

AI is now deeply ingrained in our lives, from influencing our choices while shopping online to assisting us in booking meetings and framing schedules to finding best deals. AI is ubiquitous, from social media, digital advertising and gaming to even healthcare and diagnosis.

Although traditional AI techniques may rely heavily on historical data, and given how COVID-19 has changed the business landscape, historical data may no longer be relevant. This means that AI technology must be able to operate with less data via “small data” techniques and adaptive machine learning. These AI systems must also protect privacy, comply with federal regulations and minimize bias to support an ethical AI.

Growing clout of conversational AI in form of digital assistants, including Amazon’s Alexa, Apple’s Siri, Alphabet's OK/Hey Google, and Microsoft’s Cortana and chatbots, deserves a special mention in this regard.

Notably, AI is based on data-driven simulation of human intelligence processes by machines, especially computer systems.

Enterprises are harnessing the power of AI as it collaborates with the workforce and facilitates superior work with robust automation and accelerated computing of complex workloads. The enhanced productivity of employees’ helps companies to realize business goals faster than projected.

The scope and utility of AI is set to expand even further as focus toward boosting user experience increases and companies seek to offer customized solutions. Moreover, the growing popularity of autonomous cars and smart devices have set the stage for solid growth in the AI space.

Markedly, Gartner predicts that AI and emerging technologies including virtual personal assistants and chatbots “will replace almost 69% of the manager’s workload” by 2024.

Investing in AI Stocks: A Prudent Strategy

Increasing optimism in AI space is evident from strong performance of Global X Artificial Intelligence & Technology ETF, which has surged 80.4% in the past year compared with the SPDR S&P 500 ETF's rally of 48.2%.

Investors looking to tap the budding prospects in this lucrative AI market can count on these four tech companies that are well-prepared to capitalize on coronavirus crisis induced proliferation of cloud computing.

4 Top Picks

Microsoft is well positioned to gain from increasing penetration of AI expertise across its product portfolio, including Microsoft 365, Teams, Dynamics 365, HoloLens and cloud computing platform, Azure. Microsoft AI platform is a robust framework for developing AI solutions in conversational AI, machine learning, data sciences, robotics, IoT and more.

The tech giant is focusing on democratization of AI by development of conversational AI, ML, data sciences, robotics, and IoT. Moreover, Microsoft’s Azure contains AI-driven tools for medicine, language, robotics, medical imaging and more.

The company has also invested $1 billion in OpenAI that produces artificial general intelligence, a technology that works like human intelligence. The company’s GitHub acquisition, which enriched its AI capabilities, is a key catalyst in this regard. Moreover, recent buyouts of Bonsai, Lobe, CyberX and Softomotive remain noteworthy.

In fact, on Mar 16, 2021, Microsoft announced acquisition of The Marsden Group, which offers industrial technology innovation and rapid prototyping solutions, in a bid to strengthen digital transformation capabilities across its cloud, edge and AI products.

The cloud-centric company currently carries a Zacks Rank #2 (Buy). Notably, the Zacks Consensus Estimate for earnings for fiscal 2021 has improved 0.4% to $7.37 over the past 30 days. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

NVIDIA Corporation’s DGX systems are designed to give data scientists powerful tools for AI exploration that go from office desk, to data center, and the cloud.

The company is engaged with a number of organizations including the top cloud server companies like Amazon, Baidu and Facebook, which are infusing AI in various applications. NVIDIA has also partnered with the industry biggies — IBM, Microsoft and SAP in order to bring AI to the enterprise users’ table.

By applying its GPUs in AI models, the company is expanding its base in the other untapped markets like automotive, healthcare and manufacturing, which will support its earnings and revenues. Notably, NVIDIA’s focus on incorporating AI into the cockpit for infotainment systems is allowing it to grow its autonomous driving revenues.

The company, which currently carries a Zacks Rank #2, has also collaborated with the top-ranked OEMs including Dell, HP and Lenovo to deliver powerful workstations inclusive of Quadro RTX GPUs and its new CUDAX AI accelerated software.

The company recently announced a comprehensive software portfolio of enterprise-grade AI tools — NVIDIA AI Enterprise — developed in partnership with VMware. Moreover, the company’s accelerated computing platform is being utilized by the Italian inter-university consortium CINECA to build the world’s fastest AI supercomputer.

Notably, the Zacks Consensus Estimate for the company’s fiscal 2022 earnings has moved north by 15.1% to $13.37 over the past 60 days.

Alphabet’s division Google, which continues to strengthen its AI solutions portfolio, remains a top name among tech giants.

The company’s cloud computing arm, Google Cloud, is continuously gaining solid momentum with the support of its robust ML solutions. Its Document AI solution helps in analyzing documents efficiently.

Apart from cloud computing, the company has been exploring ways to infuse AI techniques in the process of Google’s robust mobile search, which is gaining solid momentum. Additionally, strong focus on innovation of AI techniques and the home automation space should aid business growth in the long term.

Further, Google has substantially invested in AI. Notably, the Fitbit acquisition expands Google’s AI-driven presence in the lucrative health care market, as it can provide valuable insights to medical professionals about broader health trends.

Further, Alphabet, which currently carries a Zacks Rank #2, has been a frontrunner in the autonomous driving space on the back of its Waymo vehicles that are integrated with the AI and ML technologies.

Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 0.3% to $69.28 over the past 60 days.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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