Artificial Intelligence: Growth Engine of the Future

The AI industry continues to show remarkable growth, driven by advancements in generative AI, machine learning, and data analytics. Analysts from leading research firms and financial institutions are optimistic about AI's growth prospects, which they project to extend through 2025 and beyond. According to Gartner, the market for AI software is expected to grow to 135 billion USD by the end of 2025, representing an annual growth rate of 21%. This increase is largely fuelled by the adoption of AI in sectors such as healthcare, finance, and retail. McKinsey forecasts that AI could contribute up to 13 trillion USD to the global economy by 2030, underscoring the technology's significance for economic growth. A Bloomberg report shares these projections, emphasizing that investments in AI startups continue to advance rapidly, even amid broader economic downturns in the technology sector. In the first half of 2024, over 40 billion USD in venture capital was invested in AI-oriented firms. A significant portion of these funds is flowing into generative AI, a subfield of AI that has garnered attention due to its ability to produce human-like texts, images, and designs. According to analyses by Goldman Sachs, generative AI could increase global productivity by 7% over the next decade, adding an additional 4.4 trillion USD to the world economy. Experts view the ability of generative AI to handle complex tasks such as the creation of legal documents and even medical diagnoses as revolutionary across numerous industries. CEOs of major technology companies are currently placing a strong emphasis on AI development. Satya Nadella has emphasized that AI is the defining technology of our time, highlighting the role of generative AI tools, such as Copilot and Azure OpenAI, in revolutionizing work processes and boosting productivity. Sundar Pichai stressed the importance of responsible AI development, stating that AI's potential is immense and may prove to be more profound for humanity than electricity or fire. Andy Jassy pointed out that after optimizing cloud costs, companies are increasingly investing in generative AI, which already constitutes a billion-dollar business. The method behind our selection of AI news is based on identifying news that, despite their market significance, have received little media attention so far. The companies described in these news pieces are also popular among hedge funds, as our research has shown that we can outperform the market by mimicking the top stock picks of leading hedge funds. Our quarterly newsletter strategy selects 14 small- and large-cap stocks per quarter and has achieved a return of 275% since May 2014, outperforming its benchmark by 150 percentage points. Intel is currently in the spotlight as it markets technologies for smart devices. Speculations about the sale of core assets have drawn attention to a management-led shift in priorities. CEO Pat Gelsinger recently announced that the company had completed more than half of its goal to lay off around 15,000 employees by the end of the year. Additionally, the company plans to reduce its global real estate holdings by about two-thirds by year-end and to manage its liquid assets carefully to improve its balance sheet and liquidity. In our ranking of AI news, Intel ranks 16th. While we see potential in Intel, we believe that other AI stocks promise higher returns within shorter time frames. **Note:** Disclosure: None. This article was originally published at Insider Monkey.