Ai Stocks Span Chips Software Internet Giants
Microsoft in April 2021 acquired speech recognition software maker Nuance Communications , whose artificial intelligence tools are widely used in the health care market. In addition, Microsoft aims to deliver Nuance AI tools to health care customers via its Azure cloud computing platform.
Microsoft, Google and Nvidia have dropped off the IBD Leaderboard, which is IBD’s curated list of leading stocks that stand out on technical and fundamental metrics.
The worldwide AI semiconductor market will grow to more than $70 billion by 2025, up from $23 billion in 2020, forecasts research firm Gartner.
AI technology uses computer algorithms. The software programs aim to mimic the human ability to learn, interpret patterns and make predictions.
“Machine learning” is the most widely used form of AI deployed in industries. Machine learning systems use huge troves of data to train algorithms to recognize patterns and make predictions.
“AI workloads are classified as training or inference,” Oppenheimer analyst Rick Schafer said in a recent note. “Training is the creation of an AI model through repetitive data processing/learning. Training is compute-intensive, requiring the most advanced AI hardware/software. Generally located in hyperscale data centers, we estimate training total addressable market at $21 billion by 2025.”
Why The Tech Industry Is Important
These products and services are then disseminated throughout the economy. There is no sector of the modern economy that technology does not touch and that does not rely upon the technology sector to improve quality, productivity, and/or profitability.
Tech is also notable for its rabid competition and rapid obsolescence cycles. Although the examples have been used so often they have become cliché, it is nevertheless still a fact that computers used to occupy entire rooms, 16 GB of hard drive storage was perfectly adequate for a tablet, and cell phones used to flip open and closed. With that constant drive to adapt and overcome competitors with new products, no company can rest easy for long in the tech sector.
This rapid cycle of obsolescence means that winners and losers in technology do not necessarily maintain those positions for long. Microsoft was founded in 1975 and after dominating in software for computers, has had to play catch up in the mobile space. Likewise, Apple was left for dead in the 1990s but sprang back to vigor with its innovative smartphone products. Moreover, that dynamism and impressive growth make technology a must-consider sector for virtually every equity investor.
Investing In the Tech Industry
Nio Chinese Tech Company Manufacturing Evs
When considering the most popular tech stocks to watch, you should not hesitate to look past software companies. And if you wish to diversify internationally, Nio is a prominent company that can give you exposure to the Chinese markets. Nio is a leading name in the Chinese electric-vehicle field and specializes in the designing and manufacturing of premium EVs.
Nios EVs boast advanced technological features such as autonomous driving making it one of the most popular Chinese tech stocks to consider in 2022. Moreover, it also designs digital cockpits that support virtual reality shops. The company is also expanding its EV charging network across China and Europe.
Although headquartered in China, Nio stock is primarily listed and traded on the NYSE. And you can invest in this company via an online broker like eToro without paying any commission even if youre based in the US. That being said, like other Chinese tech stocks, Nio has taken a beating in the stock market in recent months.
Over the past year, Nio stock has decreased by over 50%. This downtrend was caused by political and regulatory fears, along with increased supply chain costs and lockdowns in China. Nevertheless, Nio continues to strategize for its future growth and is planning to launch new EV models by the end of 2022.
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Evaluating A Tech Stock Before Investing
When investing, you must carefully evaluate the stocks youre interested in.
Technology companies, in particular, tend to have high price-to-earnings ratios, meaning that the companys profits may seem low compared to the price of their shares. This is often because investors are expecting rapid future growth.
Other key metrics include price-to-sales, which compares the stock price to the companys revenue. This is something to consider in the case of a fast-growing company that doesnt yet have substantial profits.
Another critical factor is the companys overall revenue growth the pace at which revenue increases year-over-year or even quarter-over-quarter.
A more detailed metric that can be useful for tech companies is gross margins, which is the difference between a companys revenue or sales and the cost of generating those sales, divided by total revenue. The resulting percentage indicates whether the company can make money on the actual product it sells and how much. If the companys other costs can go down as a percentage of total revenue, profits can grow more quickly.
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Apple Tech Stock Delivering Consistent Product Innovation
As you likely know, Apple is a giant in the smartphone industry and continues to deliver impressive growth. The company posted strong earnings for Q1 2022, reporting a revenue record of $97.3 billion, up 9% year over year. In the last five years, this tech stock has witnessed its value increase by nearly 290%.
Apple has benefited significantly from the growing adoption of 5G smartphones. In 2021, the company sold over $190 billion worth of iPhones, which made up more than 50% of its total revenue. The 2022 iPhone SE model is expected to boost sales even further, due to its relatively affordable price tag.
Since the beginning of 2022, Apple stock has fallen by nearly 19%. Despite broader turbulence in the stock market, Apples business remains robust. At the time of writing, Apple is trading at around $150, which is about 20% below its 52-week high.m Apple has repeatedly succeeded in creating innovative products that bring in billions of dollars in sales.
Moreover, it also offers a running dividend yield of around 0.60%.
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Do You See The Most Returns When Investing In Tech Stocks
Most returns when investing in tech stock can vary depending on the specific company and the current market conditions. Nonetheless, many investors believe that tech stocks generally have a higher potential for growth than other types of stocks, making them a good choice for those looking to generate returns. During the past five years, technology stocks rose a total of 129.8%, while the broad S& P 500 Index grew by 60.2%.
But just because tech stocks have outperformed other industries, it doesnt mean that it will always be that way. During 2022, for example, tech stocks have declined 22.7% through Aug., while the S& P 500 fell 16.8% year-to-date.
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Why Do We Choose New Tech Companies To Invest In
Early-stage companies have a lot of growth potential. Theyre often in the midst of innovating new technologies and trying out new product concepts. If you want to get involved in the startup scene but dont know where to begin, early-stage investments might be a good option.
These companies are typically in the development stages. They might have just begun to test the waters with their product or service.
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How To Invest In Emerging Technology
As science keeps on evolving, many are wondering how to invest in emerging technology. Heres a breakdown of several key sectors.
As technology continues to evolve, new investment opportunities are cropping up.
Sometimes called disruptive technologies, emerging technologies can be defined as tech sector segments that are set to massively impact human lives in the next decade.
Many types of technology fall under that umbrella, but a few of the best-known categories are artificial intelligence , robotics and mobile technology. Read on for a look at the overall emerging technology space and how investors can jump into those three specific arenas.
This is an updated version of an article first published by the Investing News Network in 2017.
Dont forget to follow us @INN_Technology for real-time news updates!
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
Uae In Focus Uae Us Sign Mou To Lower Trade Barriers And Promote Economic Growth
RIYADH: The UAE Ministry of Industry and Advanced Technology has signed an initial agreement with the American National Standards Institute to lower trade barriers and promote economic growth.
The memorandum of understanding was signed during the ISO Annual Meeting 2022, which is taking place in Abu Dhabi this week, according to a statement.
This comes in line with the ministrys efforts to collaborate with global partners in the field of standardization as part of its work to align with international standards and best practices.
In the first half of 2022, the US was one of UAEs largest trading partners, with non-oil trade between the two countries reaching almost $14.5 billion.
Energy agreement
UAEs president Mohammed bin Zayed Al-Nahyan has signed an agreement with German Chancellor Olaf Scholz that covers accelerating energy security and industrial growth, according to Emirates News Agency.
As part of the agreement, Abu Dhabi National Oil Co. has entered into an Liquid Natural Gas supply agreement with RWE AG.
ADNOC will be providing LNG cargo for delivery in late 2022, to be used in the commissioning of Germanys floating LNG import terminal at Brunsbüttel.
Air defense
Israel has agreed to sell an advanced air defense system to the UAE, Reuters reported citing two sources familiar with the matter.
This constitutes the first such known deal between both countries since they forged ties in 2020.
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Software Companies Integrate Ai Tools
AI companies to watch include information technology services firms such as IBM, Accenture, and Epam Systems .
Research firm IDC estimates that IBM, Accenture and Infosys hold 28% of the $17 billion artificial intelligence IT services market, said a Susquehana Financial Group report.
Tata Consultancy Services will partner with Walton Centre NHS Foundation Trust to build digital solutions for patient care. Tata Consultancy will develop an AI-based chatbot that will help reduce the three-month waiting time for patients to see a specialist consultant.
In addition, software companies are among artificial intelligence stocks to watch. Many software-as-a-service companies use AI tools.
In the auto insurance and collision repair industries, CCC Intelligent Solutions aims to get an edge with AI tools..
Bank of America recently upgradedPalantir to buy citing its AI prowess.
Digital media and marketing software maker Adobe at a recent conference strutted out cloud-based tools that will allow companies to better personalize content for customers on a large scale.
Should You Invest In The Hottest Tech Stocks
Investing in individual stocks can be tough. You need to understand the business and the industry, and know where theyre heading. With tech stocks, that means you may need to research and understand many complex things. For those who have the time and willingness to invest the energy into doing it, they may be able to get some of these great returns.
Is everyone else out of luck? Nope. In fact, any investor can take part in the rising tech industry, even with just a little knowledge. Thats because investors have the ability to buy index funds based on whatever sector of the market they want. These funds track a specific collection of stocks and dont try to beat the market but instead get the weighted average of their holdings.
So if youre looking for tech stocks, consider mutual funds or exchange-traded funds that focus exclusively on the technology sector. Youll have a wide assortment of funds, ranging from exclusively tech-focused funds to those with a huge allocation to tech, such as an index fund based on the Nasdaq Composite index, a collection of thousands of stocks trading on the Nasdaq exchange.
But a key for whatever you invest in: If you dont hold onto your stock or fund, you wont get the returns that it could offer. Thats one reason that passive investing often trumps active trading.
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Major Oil Companies Investments In Renewable Energy Projects
BP
BP was the first oil major to commit significant capital to renewable projects, such as wind and solar, from 1980 onwards.
Formerly known as the British Petroleum Company, it rebranded to Beyond Petroleum in 2001 with a look towards other energy sources beyond oil.
In the aftermath of the 2010 Deep Water Horizon oil spill incident in the Gulf of Mexico, BP closed most of its previous green energy investments, believed to be worth about $8bn to $10bn.
But the company still has more than 2200 megawatts of wind capacity in the US and has started to re-invest in renewables in recent years.
It spent $200m in 2017 on acquiring a 43% stake in Lightsource, which has rebranded to Lightsource BP and is Europes largest solar power project developer.
In 2018, the firm made three investments to prepare for a low-carbon future.
The first of which was a $20m investment in StoreDot, an Israeli developer of rapid-charging batteries.
BP then made a $5m investment in US company FreeWire, which makes fast-charging infrastructure for electric vehicles.
And finally, $160m was spent on acquiring Chargemaster, the UKs leading network of charging points.
This allowed the oil firm an opportunity to combine Chargemasters 6,500 charging points network with its 1,200 petrol stations.
Shell
It spent a reported $2bn on setting up a low-carbon energy and electricity generation business in 2016 ensuring it was on course to meet its targets at the time.
Total
Eni
Chevron
ExxonMobil
Should You Invest In Startups
The question of whether or not to invest in startups depends greatly on your circumstances. Are your finances in good shape? Are you struggling to pay down debt or hit your savings targets?
When you think about an average person in the United States, who has probably not saved enough for retirement I would not recommend that they invest in a startup as an alternative to putting money in a 401 or an IRA, says Schryver. The potential for loss is simply too high.
Thats why in the past, startup investing was only available to accredited investors who already had substantial income and high net worths.
Now that crowdfunding platforms have made it possible for anyone to invest in a startup, experts recommend keeping the following principles in mind:
My biggest concern with startups is that they are often most attractive to those who have fallen behind in saving for goals, says Joel Cundick, a CFP in McLean, Va. They may feel like a startup can be a home run that can help them catch up. These individuals may not be able to afford to take that risk and should first focus on building a diversified portfolio to do the majority of the heavy lifting.
Odds are, the companies included in your diversified portfolios ETFs and mutual funds are investing in startups, which may give you some of the exciting startup growth youre after anyway.
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Icipating In Tech Startup Ipos
IPOs offer investors the opportunity to get in on a tech startup as it starts trading on the open market. IPOs are usually discounted to ensure sales, which makes them even more attractive, especially when they generate a lot of buyers from the primary issuance, Investopedia explains.
Until recently, many tech companies chose to stay private for longer, either delaying their IPO launches or forgoing them altogether. However, in recent years tech companies have been keen on IPOs.
Research from Baker McKenzie shows that 2020 and 2021 were record years for global IPO raises. The financial and technology industries top the list in terms of both volume and capital raises. Three of the biggest IPOs for 2020 included Airbnb for US$3.49 billion, DoorDash for US$3.37 billion and Snowflake for US$3.9 billion. The winning technology IPOs in 2021 were centered on electric vehicles, ride-hailing apps and fintech, including Rivian for US$11.9 billion, Grab for US$4.5 billion and Nubank .
to learn more about how to participate in an IPO.
Understand The Risks Involved
Every business investor will tell you that every investment opportunity comes with a fair amount of risk.
Its critical that you employ informed decision making when investing in either the pre-IPO space or the stock market.
Most conservative investors will prefer investing in startups and companies that have been public for some time.
Why?
Its because more information about their growth trajectory and overall success is readily available in stock market charts and reports.
Private companies and boards are typically not required to disclose certain information to the public. This is primarily due to the nature of company ownership. Because of this, the information you gather about the tech startups performance is limited.
There is also the looming risk that the tech startup youve invested in wouldnt survive.
As someone investing in tech startup pre-IPO, you need to embrace the losses just like with your profits.
Remember that you can lose what youve invested in a tech startup pre-IPO because of the current economic environment.
Fortunately, companies already recognize such risk and would often offer discounted prices for shares to entice angel investment and early-stage funding.
Most tech startup product development activities rely on applications and software. As such, they can start operations at a minimal cost. Thats why they can perform positively on smaller capital funds.
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Are Semiconductors A Good Investment
The performance of semiconductor stocks can be unpredictable, and the semiconductor industry is complicated. There are hundreds of steps involved in manufacturing the most advanced circuitry, and dozens of players are involved in producing the equipment used to make semiconductor chips.
