It’s difficult to overstate the optimism surrounding artificial intelligence. Tesla Inc. (TSLA​) has already introduced self-driving cars, while the United Nations recently warned that two-thirds of developing world jobs will be replaced by intelligent robots.

Research and Markets expects the global artificial intelligence market in the industrial sector to grow at a blistering 52.65% pace between 2017 and 2021 while Transparency Market Research sees the market surpassing $3 trillion in size by 2024.

These projections have led many artificial intelligence stocks to soar to new highs in recent weeks as deal-making in the space accelerates. For instance, International Business Machines (IBM) and Salesforce.com (CRM) announced that Watson and Einstein would join forces to create the biggest AI platform in the space with over a billion users per day. The move could provide the companies with a monopoly of sorts when it comes to enterprise users.

From a technical perspective, traders should keep an eye on both stocks as they appear ready to breakout to new highs. CRM has the greatest momentum with its 21% rise so far this year, but IBM has outperformed over the past 52-weeks by about 8%.

CRM’s stock appears poised to breakout from its all-time high of $84.48 reached back in mid-2016 with the momentum from its deal with IBM. However, the stock’s relative strength index (RSI) appears overbought at 65.49 and its MACD​ remains in a bearish downtrend, which means that traders may want to wait for a modest pullback before a breakout.

IBM’s stock has moved steadily higher since the beginning of the year and experienced a modest pullback over the past week or two. This has helped brings down its RSI to more moderate levels of 47.02, although its MACD remains in a bearish downtrend. Traders may want to watch the 50-day moving average at $174.48 as a support level.

The artificial intelligence industry is rapidly evolving with breakthroughs occurring every day, which provides many catalysts for traders watching these stocks. Investors looking for broader long-term exposure may want to consider AI-focused ETFs, like the Global X Robotics & Artificial Intelligence Thematic ETF (BOTZ​), to gain diversified exposure to the space. That ETF has also broken out to new all-time highs given the optimism surrounding the industry.

Charts courtesy of StockCharts.com. Author holds positions in stocks mentioned v iaETFs and mutual funds.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.