In the investment world, AI is on fire.
Since the introduction of OpenAI's ChatGPT last fall, the technology's transformative potential has enthralled investors, who've sent AI-oriented investment funds soaring this year as they also scrutinize which individual companies might benefit most from the technology.
The iShares Robotics and Artificial Intelligence Multisector ETF (IRBO) has gained 15% year-to-date, with rival Global X Robotics & Artificial Intelligence ETF (BOTZ) surging 13%.
While obvious suspects such as Amazon, Google, and Apple stand to reap AI's rewards, likely beneficiaries also include smaller, more obscure companies in industries ranging from finance and human resources to travel and transportation.
Wealth management firm Baird last week issued a research report detailing its top 50 AI and machine learning stock picks. That followed a Forbes list of best AI stocks to buy in 2023.
Four companies appeared on both lists: Alphabet (Google's parent company), Adobe, Amazon, and Nvidia. Forbes identified such old-school and high-profile firms as IBM, Oracle, and Microsoft, while Baird targeted well-known names such as Pinterest and Accenture.
The lists also highlighted numerous smaller companies, all that someday may have the chops to strike AI gold. A few examples:
- C3.ai (AI): Buoyed by a partnership with Alphabet, C3.ai provides software to develop and run AI applications that aid supply-chain efficiency and support specific industries, such as energy and financial services. Its applications are available on Google Cloud.
- Palantir (PLTR): Palantir operates data mining platforms used by government agencies to locate and respond to terrorism threats; its Gotham operating system may have played a role in capturing Osama Bin Laden in 2011. The firm's platforms also help businesses house and streamline organizational data.
- PROS Holdings (PRO): PROS uses AI/machine learning to gather analytics about market and buying behaviors, helping companies optimize pricing and interactions between buyers and sellers.
- Phreesia (PHR): Phreesia's "Appointment Accelerator" application helps healthcare providers reduce lost revenue from open appointment slots and save time from canceled visits.
- Okta (OKTA): Okta's Identity Cloud program uses machine learning to detect and block suspicious login attempts and identify other activities that could compromise business security.
- Paycor HCM (PYCR): Payroll and so-called human capital management (HCM) providers reduce service and implementation costs via AI bots that answer and fulfill service requests. AI also can aid recruiting: Paycor recently purchased Talenya, which helps hiring managers efficiently find employment candidates.
- Dynatrace (DT): Dynatrace calls its Davis platform an "AI causation engine." The cloud software helps quickly detect performance anomalies in technology applications and infrastructure with a prediction-based method. The firm says the engine can analyze 368 billion dependencies per second.
- TaskUs (TASK): TaskUs provides digital outsourcing to support a wide array of business services, including product launches, customer acquisition, and removal of misleading content. Its AI solutions include data labeling and training transcription services.