Microsoft Just Became the Hottest Name in AI, but Google, NVIDIA, IBM and Other Rivals are Turning up the Heat
by Daniel Newman | March 8, 2023
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The hottest name in AI? Microsoft MSFT, -0.73%. With its recent investment in OpenAI, best known for its chatbot ChatGPT3 that is taking the world by storm, Microsoft has shown its commitment to leading the age of artificial intelligence.

With all the headlines about Microsoft’s rapid ascent in AI, it isn’t a surprise that investors are excited about its prospects. With Microsoft’s Bing sitting at around 7% of the search market, Microsoft shared with investors recently that it estimated an additional $2 billion a year in revenue per 1% gain in market share. That’s a massive opportunity for Microsoft.

Yet demand for AI is expected to grow at close to a 20% compound annual growth rate, and Microsoft isn’t the only bet for investors looking to ride the AI wave long-term.

Here are three more companies making significant AI investments that investors should follow.

Alphabet: If Microsoft was the winner of the past few weeks, it was mainly at Alphabet’s GOOGL, 0.28% Google’s expense. But anyone calling the Microsoft vs. Google race over at this point is doing so at their own risk.

While Microsoft is on the front foot and has showed off some incredible technology — putting Google’s search empire at risk for the first time in more than two decades, don’t expect Google to stand still and wait for Microsoft to take significant market share.

Instead, the company announced Bard, its next-generation ChatGPT competitor, and is beginning a wave of announcements to contest the recent Microsoft updates. Google has been actively investing in breakthrough AI for its search and cloud businesses, and while it may be forced to speed up its development and product launches, it is hard to imagine that Google doesn’t come up with an AI story that investors take seriously.

ServiceNow: ServiceNow NOW, -0.21% sits in a great position. The need for workflow automation, which continues to be more AI-infused, will only gain momentum as businesses pour more resources into their digital transformation projects.

In the past, automation was about scripted processes that could be repeated with code. In the future, workflows will be fluid and self-improving to enable businesses to leverage larger data sets to streamline almost every business function. Furthermore, ServiceNow’s platform has the flexibility to act as an orchestration layer across diverse and complicated enterprise IT environments. AI will make this capability more pronounced and less complex for enterprises and will be a catalyst for further growth.

NVIDIA: No other company has been as closely linked to being the enabler of AI in recent years as NVIDIA NVDA, 2.62%. The company has been building the full stack of building blocks for AI, including the hardware, software, and frameworks required for training and inference in consumer and enterprise applications.

In many ways, the ability of programmers to leverage the power of GPUs has been supercharged by NVIDIA. This has enabled AI-powered innovations in gaming, automotive, data center and more. The practical development of the metaverse, such as building digital twins for automotive engineers, is leveraging a combination of NVIDIA hardware and software, including its Omniverse tools, which will undoubtedly be critical to the future of immersive digital experiences.

This only scratches the surface of NVIDIA’s contributions to AI. From its recommendation engines to its conversational AI models, NVIDIA undoubtedly will continue to be a core holding for investors wanting to play in the AI space. Furthermore, its stock price is well-below its 2021 highs, providing significant potential upside as tech comes back in vogue.

Six Other AI Plays Worth Watching

IBM: Big Blue IBM, -0.49% stock has seen a significant run over the past year, with AI being one of its two major catalysts. The company is fully committed to AI as its path to sustainable growth.

Oracle: Oracle’s ORCL, -0.16% massive business dataset enables it to build prebuilt AI models to deliver scalable business insights. It’s early days for Oracle AI, but it’s hard not to see solid mid- to long-term upside.

Meta Platforms: Meta Platforms META, -0.62% had a rough year in 2022, but its ability to apply AI and machine learning to its data to monetize its user base has never been an issue.

Workday: From HR planning to budget management, Workday WDAY, -1.95% is leveraging AI to help businesses optimize hiring processes and manage spend across the enterprise.

Salesforce: With a new activist investor in tow, I expect Salesforce CRM, -0.39% to accelerate innovation, and its biggest bets have been on its AI offerings, including Genie and Einstein. AI is infused in just about every part of Amazon’s AMZN, -0.15% business. From a mass of AWS services for enterprise to e-commerce powered end to end with AI driving pricing to next day delivery.

Disclosure: Futurum Research is a research and advisory firm that engages or has engaged in research, analysis, and advisory services with many technology companies, including those mentioned in this article. The author does not hold any equity positions with any company mentioned in this article.

Analysis and opinions expressed herein are specific to the analyst individually and data and other information that might have been provided for validation, not those of Futurum Research as a whole.

The original version of this article was first published on MarketWatch.

About the Author

Daniel Newman is the Chief Analyst of Futurum Research and the CEO of The Futurum Group. Living his life at the intersection of people and technology, Daniel works with the world’s largest technology brands exploring Digital Transformation and how it is influencing the enterprise. Read Full Bio