Source: Von Lamai Photography/Shutterstock.com
Investing in machine learning is often considered synonymous with investing in artificial intelligence (AI). In fact, many of the most popular AI stocks are also good machine learning stocks.
But there are important differences. Simply put, artificial intelligence requires machine learning. The opposite is not true. Machine learning is a key factor that companies need to develop his AI applications.
The global machine learning market in 2022 is valued at $19.2 billion. It is expected to grow to $26 billion by 2023. And by 2030, this market is expected to reach $225.9 billion. The compound annual growth rate (CAGR) during this period is 36.2%.
And given the need for machine learning in critical areas such as cybersecurity and healthcare, we can see why now is the perfect time to invest in it. Here are three companies with explosive potential beyond 2023.
Alphabet (GOOGL/GOOG)
Source: Koshiro K / Shutterstock.com
alphabet (Nasdaq:Google, NASDAQ:goog) was one of the early adopters of machine learning. Investors may be best aware of how machine learning is used in the company’s search engine. But machine learning is also important to some aspects of the company’s business, most notably his Google Cloud, one of the fastest growing platforms in Big Tech, his infrastructure. .
When ChatGPT launched in early 2023, the company demonstrated its leadership in machine learning. Google has long been rumored to have its own generative AI solution. This allowed Alphabet to launch his Bard quickly, and early reviews suggest he’s a strong contender to ChatGPT.
Among tech stocks, Alphabet appears to have room for growth. Alphabet was just beginning to awaken from his 2022 slumber when ChatGPT came out. From November 2021 to December 2022, GOOGL stock is down nearly 40%. But 2023 looks even better, with the stock up 35% at the market close on July 7.
Palantir (PLTR)
Source: Poetra.RH / Shutterstock.com
Palantir (New York Stock Exchange:PLTR) is one of the most attractive stocks for investors looking to profit from AI. However, if you’re interested in investing in machine learning, Palantir is also an option. The company emerged with a cloud-based, customizable platform (Gotham, then Foundry) that enabled governments and private companies to efficiently aggregate big data as a way to improve decision-making.
One of the lingering blows to Palantir, even in 2023, is the lack of revenue. This situation has changed over the past two quarters, and so has the price of PLTR stock. This is good news for long-suffering PLTR shareholders, but should you consider taking a new position now?
The answer depends heavily on the ability of companies to continue to win new business on both the government and commercial sides. With increasing profits and no debt, the company can afford to be aggressive.
Snowflake (SNOW)
Source: Miscellaneous goods photo / Shutterstock
Nothing is certain, but when it comes to investing in machine learning, Alphabet and Palantir are as close as you can get. The same cannot be said immediately, but snowflake (New York Stock Exchange:snow).
Key to machine learning is the ability to aggregate frequently received data from different areas of the enterprise. That’s what Snowflake, a cloud-based storage company, offers to its customers. The company also has its own integrated and embedded systems for machine learning.
Since going public in 2020, the company has reported revenue growth every quarter. But that’s not reflected in SNOW’s stock price. The main reason is that the company is not yet profitable.
This is a good reminder that a company and its stock are two different things. If the company continues to grow earnings at its current pace, the stock should eventually match its performance.
At the date of publication, Chris Markoch held a long position on the PLTR. The opinions expressed in this article are those of the author and are subject to InvestorPlace.com Publishing Guidelines.
