Beyond ChatGPT:

How Artificial Intelligence is
Shaping the Investment Landscape

The machines are taking over.

What was once merely a trope of science fiction has basically become a reality in the world of investing.

Ever since the release of ChatGPT in November 2022, artificial intelligence has been dominating headlines everywhere you look.

Some of those headlines sing the praises of its possibilities.

Some give dire warnings about what this technology will do in the wrong hands.

For investors, recent developments in artificial intelligence have become a new gold rush that has all kinds of money pouring into the tech sector.

At its core, this technology is so versatile that it can be applied to a number of different sectors. From security, to customer service, manufacturing, cleantech, health care, and transport, it seems like there isn’t any place that AI won’t touch.

That’s what makes it one of the biggest investment stories in years.

And just like the technology can be applied in a variety of different ways, there are countless companies to watch in the space for the ways they will play it.

Again, this is a modern-day gold rush, so anyone looking to put money into artificial intelligence needs to do due diligence and ensure that any AI plays they invest in aren’t simply in it to make a quick buck.

That’s something you often see with red-hot investment sectors — fly-by-night companies who add the sector in question to their name, take money from investors who don’t know any better, and then vanish before anyone really catches on.

With the recent surge of interest in artificial intelligence, that can be an easy trap to fall into.

This special report will go beyond ChatGPT and look at some of the far-reaching effects of artificial intelligence and just how it’s going to change the investing landscape. In it, you’ll learn about some companies that are truly making huge strides in the space and see just why they are some of the names favored to win big over the coming years.

 

How Artificial Intelligence Is Being Used

Efficiency and versatility are the big draws behind artificial intelligence.

The technology can be adapted to a number of different tasks, making it an ideal tool for many different industries and sectors.

IT Security

IT systems live and die by how secure they are from attacks at the hands of bad actors. Banks, governments, and health care systems are just some of the frequent targets of these attacks, and the means that attackers use have only gotten more sophisticated with time.

AI can be used to generate lines of malicious code more easily or to help in phishing attempts so hackers can gain access to sensitive data.

But IT professionals can also use it to do things like provide continuous monitoring and automate incident response, making security a more ever-present practice. It can also be used to identify suspicious login attempts and provide more robust password management.

IT security is a constant arms race between attackers and defenders, and AI is perhaps the most powerful tool to enter the space in decades. That’s why attackers are using it more and, more importantly, it’s why the majority of companies are factoring AI and machine learning into their IT budgets.

It comes down to being able to manage the data that comes through the networks and systems, and the sheer amount is impossible for humans to manage and analyze manually, which is why AI is being relied on to do it instead.

Logistics

Logistics are the lifeblood of the global economy and another place where AI is set to thrive.

The COVID-19 pandemic taught us a lot of things, but one of the biggest shocks we faced was the disruption to shipping and supply chains. You no doubt remember empty grocery store shelves and the high prices that came with the limited supply.

Even as those supply issues eased, some of the effects have continued to linger. That is especially true in the automotive industry where prices for both new and used cars are as high as they’ve ever been, and the supply still struggles to keep up with demand.

Governments and businesses took that lesson to heart and thought of ways to completely revamp supply chains and inventory management, and that is where AI can shine.

Specifically, AI tools exist to do things like help companies find suppliers and locate vulnerabilities in their supply chains. Likewise, these tools can plan around material price changes, manufacturing delays, and port congestion. Inventory can also be optimized to make warehouse workflow easier and more efficient.

And efficiency is the name of the game when it comes to managing inventory and supply chains, so logistics is one area where artificial intelligence will be playing a central role for the foreseeable future.

Healthcare

Healthcare is one sector set to undergo a massive transformation following the introduction of artificial intelligence. To explain it briefly, this technology will allow providers to diagnose patients more quickly, discover drugs more quickly, and offer patients more personalized care.

To delve into more detail, take a look at machine learning. It’s one of the core ways AI is being used in healthcare. Machine learning algorithms take large amounts of clinical documentation and can find patterns in order to predict what medical outcomes will be. It can process much larger volumes of data than any human could and is able to do it with far greater accuracy as well.

This means diseases can be diagnosed faster and much more efficiently and drugs can be discovered more quickly as well. Doctors will then be able to more accurately diagnose their patients and treat them accordingly.

The use of AI in healthcare settings will complement the practice of precision medicine, which takes things like a patient’s genetics and lifestyle into account when designing treatment. Because no two people are exactly alike, a medical treatment or method of prevention that works for one may not necessarily work for another. AI will be able to work with a doctor using precision medicine to come up with a treatment most likely to be successful for the patient.

Providers can also use AI in administration. Think about tasks like scheduling appointments, processing claims, and entering data. If AI takes over these functions, that allows organizations to focus more on providing care for their patients. Plus, it can drastically reduce human error and reduce the time it takes to do things like review records and test results.

Improving efficiency is one of the best ways to make sure patients have better outcomes. Artificial intelligence, even at this early stage, is perfectly positioned to do just that.

Customer Service

Many companies live and die by how quickly and efficiently they're able to serve their customers, so it makes sense that they would want something that can get the job done faster. AI makes that possible.

You likely already see examples of this in some cases, with websites that have customer support chatbots that appear when you log on to the site. These tools make it possible to respond to customer inquiries within seconds so that the company’s support team’s response time drops.

Likewise, AI can be used to look at things like purchase history, browsing history, and personal preferences. From there, a company can better tailor the user experience for the customer and steer them toward items and services they would likely purchase. This can also involve upselling and advertising deals that customers might be interested in.

AI can also be used as an analytical tool to look at data that’s available to you and predict future trends. Businesses can then use this data to determine how these trends will affect their operations and prepare accordingly.

All of these benefits can work together to provide a consistent user experience that will keep customers coming back, so it’s easy to see just why businesses would want to adopt artificial intelligence.

 

Companies to Watch

With all of that said, there are some companies that are in position to truly benefit from this technological shift. These are some of the names to watch.

Nvidia

Of all the companies competing for supremacy in the AI space, Nvidia (NASDAQ: NVDA) is the one to watch. It’s basically been the face of the AI rally thanks to its offerings in semiconductors, which are needed to power the systems that allow these AIs to function.

The company made its name offering graphics processing units (GPUs). Yet, throughout 2023, its name became associated with AI to the point where its stock went from $147 per share at the beginning of the year to nearly $470 by the end of the summer.

These kinds of headline-making gains brought enough attention that a lot of other firms in the sector benefited, but Nvidia remained at the top.

Because it got in on the AI race early, it has essentially cornered the market on the technology, and many analysts believe that the company’s good fortunes will continue for the foreseeable future. Some projections have the company’s per-share price reaching heights of around $1000 per share by the end of 2024.

There’s no guarantee of that, of course, but given how demand for AI is set to continue rising, it makes sense that the value of the company at the forefront of the industry would rise alongside it.

Taiwan Semiconductor Manufacturing

This is another one to watch in the AI space. Much like Nvidia, Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) operates on the hardware side, providing the chips needed to power these AI-dependent systems.

As an aside, the company doesn’t just make its money from chips produced for AI, it’s also a major supplier for chips used in smartphones. With how often new models come out and how frequently people upgrade their phones, that’s another consistent and reliable revenue generator that TSM can count on to stay at the front of the race.

Throughout 2023, the company enjoyed strong and steady growth and that trend continued into 2024.

It was founded in 1987 as the world’s first dedicated semiconductor foundry, and its industry-leading manufacturing process technology has allowed it to make customers of big names like Apple, Qualcomm, and even Nvidia.

Today, it enjoys majority control of the semiconductor foundry market, meaning it is basically the go-to name for manufacturing the world’s most advanced computer chips. With how expensive it is to manufacture semiconductors, and how complex the technology is, that’s a status TSM is likely going to continue enjoying for the foreseeable future.

That, coupled with the growing demand for artificial intelligence means that TSM is going to benefit greatly from any advances in the sector.

Recursion Pharmaceuticals

Recursion (NASDAQ: RXRX) is a company that is making strides with AI in the medical sector. The core of its business model is using artificial intelligence to identify and design new drug therapies.

The company's infrastructure uses robotics to do much of the heavy lifting in its laboratories to the point where the company can conduct 1.5 million experiments per week. Pairing that with AI to comb through the massive amounts of data needed to discover drugs makes Recursion a tech-focused drug developer to watch.

Its focus on using artificial intelligence allows it to have an easier time navigating the complexities of human biology, which is often one of the roadblocks in developing drugs. The technology is able to determine interactions between drug candidates and genes faster and more efficiently than can be done through traditional methods, saving time and money. Recursion hopes to use this advantage to create drug therapies that target rare diseases. Upon proving the success of the models used to create these drug therapies, Recursion hopes to sell them to other companies.

In July 2023, Nvidia invested $50 million into Recursion to help speed up the development of its AI models, causing the stock to soar at the time. This was a highlight in a strong year for the company, which has seen its gains outpace the S&P500.

2024 started off with the company under enough selling pressure that saw its value drop, but many analysts believe the selling trend could be nearing its end, signaling a turnaround. This makes the company one to watch and potentially buy at a discount.

Pactum

When discussing artificial intelligence, it probably didn’t occur to many people that contract negotiation was something the technology would be capable of, but it is thanks to companies like Pactum.

There is a lot of data that goes into contract negotiations, and no two sectors have the exact same needs when it comes to this crucial process. It’s already complex enough, but then you have to consider variables and the idea that, for many, negotiations often come across as a process where there must be clear winners and losers.

With its AI-powered software, Pactum is looking to change that. Through a chat-like interface, the company’s software allows the client company to engage with suppliers via a chat-like interface. The software is designed to account for factors like inflation, fluctuating prices, and other aspects that can’t be easily predicted. It then works to find a solution that is ideal for both parties, ensuring that everyone gets what they want and no money gets left on the table.

The idea isn’t to automate all of the negotiations but to handle the majority of a company’s negotiation-related workload so that human employees can focus on the truly high-priority work.

The company’s biggest client is Maersk, one of the world’s biggest shipping and logistics companies. Its software is especially suited for a critical industry like shipping where countless outside factors dictate the nature of the business.

Pactum also counts Walmart among its clients, and it’s not hard to imagine that other big names in logistics will come on board once they see what the software can do for them.

 

How the Industry is Projected to Grow

The AI sector is massive and only getting bigger.

In 2024, the global market is expected to reach $184 billion and that is projected to expand at a rate of 28.46% by 2030. That puts its potential value at around $826 billion. So, in short, there is plenty of money to be made in the space.

With AI spreading to just about every sector you can think of and touching just about every aspect of our lives, companies are going to capitalize in ways we’re only beginning to learn about.

There’s no doubt that artificial intelligence is going to be one of the biggest investment stories of the next decade as it grows beyond language models like ChatGPT and becomes more fully integrated with areas like healthcare, logistics, and many others.

The companies outlined in this report are good places to start but they are only the beginning.

More names will emerge and more opportunities will present themselves when it comes to investing in AI. You can bet that it’s something we will keep a constant eye on because of the gains that can made in the sector over the next few years.

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