3 Most Profitable AI Applications Investors Should Consider

Introducing Portfolio Manager Andrew Graham CNBC’s “Ask an Advisor” Special Corner Mid April. Founder and Managing Director of Jackson Square His Capital provided investors with clues as to where to look. AI chance:

[T]A safer bet is [artificial intelligence] Reality regardless of who wins in the AI ​​arms race. At the same time, those tackling AI head-on will pay a high price, so it’s probably best to wait for a better opportunity to jump in.

This is great advice because the companies we think have the best AI applications and solutions today may not even exist 3-5 years from now. As a result, successful AI investments require considerable investor due diligence and patience.

Conservative investors prefer exchange-traded funds (ETFs) or mutual funds, invest in one or two major AI companies. But if what you’re looking for is an individual AI opportunity, three things: Selected from top holdings of First Trust Nasdaq Artificial Intelligence and Robotics ETF (Nasdaq:Robert), which has interesting AI applications that are expected to grow in the coming years.

Professional	Pros Holdings	$27.96
now	Service Now	$442.28
answer	Ansis	$312.70

Pros Holdings (PRO)

Pros Holdings (New York Stock Exchange:Professional) provides an AI-based platform that collects and analyzes data that companies can offer to their end-user customers. personalized pricing and product suggestions.

CEO Andres Reiner provided examples of how customers are using the platform during the Q4 2022 conference call.

Signature Aviation, a B2B aviation services company, selected PROS in the fourth quarter to leverage the latest 4th generation AI advancements to drive its profitable growth strategy. In travel, the turmoil experienced by airlines over the last few years has fueled interest in extreme automation and full digitalization of the customer experience. Our digital offer marketing and dynamic offer solutions help airlines engage customers with relevant offers, engage them in direct and digital channels, and increase conversion rates through channels with lower selling costs.

In 2018, the company launched its Gen III platform. dynamic pricing. If you frequent Uber, you know about dynamic pricing. You can see it everywhere today. Then, in 2022, we announced Gen IV, a “deep neural network.” This improved the platform’s ability to accurately predict how much a customer would pay for a particular product.

Generated PROS Holdings $276.1 million Revenue in 2022 is 10% higher than in 2021. Subscription and maintenance revenue accounted for 84% of total revenue. More importantly, subscription annual recurring revenue (wearing) Excluding currency, it was $229 million, up 17% from the prior year. The company is not yet profitable, but its losses are narrowing..

Retail is a tough game. However, using the PROS platform makes things a little easier.

ServiceNow (current)

Now Platform from Service Now (New York Stock Exchange:now) help businesses Digitize your entire business By optimizing processes and connecting silos, we eliminate the friction that exists in traditional computer systems.

Produced by ServiceNow in 2022 $6.9 billion in subscription revenue Served by over 7,700 customers, including 85% of the Fortune 500. As a result, free cash flow reached a whopping $2.18 billion, or 30% of his total revenue of $7.25 billion. This is a very healthy free cash flow margin.

Based on this free cash flow and a market capitalization of $90.1 billion, ServiceNow’s free cash flow yield is 2.4%. This is outside my fair value zone of between 4% and 8%. However, this is for a company whose subscription revenue is growing nearly 30% annually.

From now until 2028, the estimated Large companies It represents the most notable growth of AI for project management. As a Now Platform, it’s exactly ServiceNow’s alleyway. Use AI search Enable help desk personnel to quickly find the documentation they need to resolve issues.

ServiceNow also updated its document intelligence AI tools in March. This enables businesses to pull information from documents and put it into business apps without manually entering data, saving time and money.

Ansis (ANSS)

Ansis (Nasdaq:answer) uses AI and machine learning to help engineers and designers create better simulations to improve and accelerate the product development process. The company has been designing engineering simulation software for over 50 years and has driven some of the world’s greatest innovations.

“At Ansys, AI/[machine learnings] How to automatically find the parameters of your simulation to improve speed and accuracy at the same time. Augmented Simulation can be used to speed up simulations by 100x by training neural networks in a data-driven or physics-based manner. Advanced AI/ML-enhanced simulation technology underpins the engineering design process. ” listed on the company’s website.

In 2022, the company posted revenue of $2.07 billion, up 8%, and operating profit of $592.7 million, up 15.5% from 2021.ACV) was $2.03 billion, up 14% from 2021 at constant currency. Management expects ACV to grow between 9.9% and 13.4% in 2023 on a constant currency basis.

Ansys just announced 2022 $275 million In terms of net debt, it’s only 1% of market capitalization. That makes it a solid long term purchase.

Will Ashworth on publication date I did not have any positions (directly or indirectly) in any of the securities mentioned in this article. The opinions expressed in this article are those of the author. InvestorPlace.com Publication guidelines.