3/18/2024

What you need to know about AI stocks

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The topic of investing in artificial intelligence (AI) stocks is dominating the financial media. One of the most pressing news is Apple’s potential deal with Google to bring Gemini technology to the iPhone.

The interest in artificial intelligence is not surprising as investors look to benefit from one of the most transformative economic sectors of the 2020s. AI has enormous application potential in healthcare, finance, entertainment and other industries. It has the potential to change not only the way businesses operate, but also the way investors approach the technology sector.

However, before diving into the world of AI investing, it is important to understand its unique features. The field is characterized by rapid innovation, an emerging market, and support from both established giants and new startups.

We tell you more about this promising, but often confusing sector.

Features of AI-related companies

When investing in artificial intelligence stocks, there are a number of things to consider that differentiate the field from more traditional industries.

First, AI companies often have high valuations based on their growth potential rather than current earnings. This makes them attractive from a capital growth perspective, but also exposes investors to higher volatility and risk.

Second, the industry is highly dependent on ongoing technological advancements and changing regulatory frameworks regarding data use and privacy. This adds complexity and uncertainty to investment decisions.

With that said, it is important for investors in this exciting but challenging space to take a strategic approach that balances enthusiasm for the potential of AI with a pragmatic assessment of risks and market realities.

How the field of artificial intelligence works

Artificial intelligence (AI) is a fast-growing field that covers many aspects of our lives. AI is a set of algorithms and computational techniques that enable machines to perform tasks previously only possible to humans.

Proponents of AI argue that it has the potential to transform business processes and service delivery models. In the future, it is expected that AI will:

  • Increases efficiency: Automation of routine tasks will free up resources for more complex and strategic purposes.
  • Improves customer experience: AI systems can personalize offers and provide more accurate recommendations.
  • Will create new opportunities: AI can be used to develop new products, services and business models.

The multifaceted nature of AI opens up new horizons and simultaneously poses a number of challenges for investors:

  • Machine learning: study of how machine learning algorithms work and their applications in various fields.
  • Natural Language Processing: Assessing the promise of AI in human-machine communication.
  • Robotics and automation: analysis of the impact of AI on the automation of production and logistics processes.
  • Computer vision: the study of the capabilities of AI in interpreting visual data and making decisions.

Application of artificial intelligence (AI) in economics

AI excites the minds of specialists in various fields. Its capabilities open up new horizons for optimizing processes, increasing efficiency and creating fundamentally new solutions in such areas as:

Healthcare: Analyze medical images with precision beyond human capabilities, helping doctors make diagnoses. AI systems can speed up drug development by predicting the behavior of different compounds.

Finance and Investment: Processing market data at unprecedented speed, giving investors new advantages and increasing the accuracy of investment risk assessment.

Automotive industry. AI plays a key role in the development of self-driving cars by processing sensor data and making driving decisions. AI systems optimize production lines and predict maintenance needs.

Entertainment and media. For example, streaming services are starting to use AI to recommend personalized content.

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