8 Best Artificial Intelligence Stocks
The world is now armed with algorithms, and data is the ammunition for the digital world.
Citizens around the globe don’t always get to opt in or out of this digital world – even when they are not actively participating in it, most people are still passively involved in the digital world. Data and the algorithms that feed upon the data are shaping our future and changing the way we look at and interact with the world.
As a market participant, however, you are in a unique position where you could capitalise on the ongoing developments in Artificial Intelligence (“AI”).
AI State of Affairs
AI, a field of study that seeks to teach computers by allowing them to learn from experience, has existed for over six decades. However, its day-to-day impact can only be felt in today’s society.
According to a NASSCOM report, AI can be expected to contribute an additional USD 450 billion to India’s GDP by 2025, accounting for 10%of India’s GDP goal. Although the rate and extent of AI adoption vary by economic sector, almost every industry is anticipated to be impacted and disrupted one way or another by robotics and AI-enabled automatic processes. Many industries stand to benefit from the introduction of AI, but a few companies, in particular, are poised to gain more than others [1].
8 AI Stocks in India
The AI sector in expected to skyrocket to $957 billion by the year 2035 and this would be equivalent to nearly 15% of India’s GDP [2]. However, it is essential to note that this sector has a higher inherent risk due to high capital requirements and cutting-edge technology demands. To filter out companies with purportedly higher risk and poorer past performance, we have taken the quantitative approach during the selection of AI stocks based on the following criteria:
- Metric 1: It outperforms the BSE SENSEX benchmark based on the buy-and-hold strategy, computed on daily closing prices for the past 12 months ending Oct 31, 2022.
- Metric 2: It outperforms the BSE SENSEX benchmark based on lower volatility [3].
- Metric 3: It outperforms the BSE SENSEX benchmark based on higher Sharpe ratios [4].
Using these three metrics against BSE SENSEX as a benchmark, we have listed out 8 AI stocks in India.
Tata Elxsi Ltd
Tata Elxsi Limited focuses on engineering and systems integration services in India, the United States, Europe, and internationally. The company provides engineering and technology services for autonomous EVs and an automated, AI-enabled smart annotation platform for the automotive industry. In addition, the company provides technology for smart home appliances, electric off-highway vehicles, autonomous vehicles, connected devices, integrated digital rail transport systems, and semiconductors.
Saksoft Limited
Saksoft Limited offers services in software product engineering, support, testing and QA, extended software delivery facility, and automation solutions, including robotics process automation, data analytics, the Internet of Things, machine learning/artificial intelligence, and test automation. Saksoft was incorporated in 1999 and is headquartered in Chennai, India.
Persistent Systems Limited
Persistent Systems Limited provides software and technology solutions for revenue cycle optimization for financial and healthcare industries. In addition, the company offers network assurance and performance management, 5G AI operations and automation, mobile edge cloud accelerators, and network API monetization solutions, and operates technology centers.
Happiest Minds Technologies Limited
Happiest Minds Technologies Limited is a digital transformation information technology (IT) consulting and services company. The company provides services such as Infrastructure Management & Security Services (IMSS) that provides security services, including cyber and infrastructure security; Digital Business Solutions (DBS) that offers enterprise applications and customized solutions, such as advisory, design and architecture, custom-app development, and testing and on-going support services to IT initiatives; and Product Engineering Services (PES) that offers services for other software product companies in building products and services that integrate mobile, cloud, and social technologies.
L&T Technology Services Limited
Formerly known as L&T Technology and Engineering Services Company Limited and changed its name to L&T Technology Services Limited in July 2012, L&T Technology Services Limited provides engineering, research, and development (ER&D) services in North America, Europe, India, and internationally. The company’s Industrial Products segment helps OEM customers in building automation, home and office products, energy, process control, and machinery sectors.
Affle (India) Limited
Affle (India) Limited provides mobile advertisement services and software development for mobiles in India and internationally. It also offers Appnext, an app recommendation platform; mDMP, a data platform; Mediasmart, a self-serve programmatic platform; Jampp, a programmatic app platform; MAAS platform, a unified audience platform for mobile; RevX, an app marketers’ platform; and Vizury, a digital and physical customer engagement platform.
Cyient Limited
Formerly known as Infotech Enterprises Limited, the company changed its name to Cyient Limited in May 2014. As a global engineering and technology solutions company, the company helps their customers across their value chain in helping to design, build, operate, and maintain the products and services that make them leaders and respected brands in their industries and markets. The company provide services and solutions to a diversified based of 300 customers, including 29 Fortune 500 companies across multiple industries. It also provides other services, and among which are data analytics, big data consulting, Internet of Things and M2M services.
Mphasis Limited
Mphasis Ltd is a provider of IT infrastructure and business consulting. The company was formed after merging with the U.S.-based information technology company Mphasis and the Indian IT services company BFL Software. Mphasis serves clients in the financial, healthcare, and telecommunications infrastructure and has global operations in China, Australia, North America, and Europe.
Final Thoughts
In conclusion, investing in AI sectors comes with high risks, but there are macroeconomic factors that point to future upward price movement. You are encouraged to learn about the market, practise in the demo account, and develop a solid risk management approach, before making a commitment to invest or trade. Also, you should always do your own research and only invest in what you understand and are comfortable with.
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References
- “Two Decades of AI: Where Does India stand today? – AIM”. https://analyticsindiamag.com/two-decades-of-ai-where-does-india-stand-today%EF%BF%BC/. Accessed 7 Nov 2022
- “Top Artificial Intelligence (AI) Stocks in 2022 – SAMCO”. https://www.samco.in/knowledge-center/articles/artificial-intelligence-stocks/. Accessed 14 Dec 2022
- “Volatility: Meaning in Finance and How it Works with Stocks – Investopedia”. https://www.investopedia.com/terms/v/volatility.asp. Accessed 7 Nov 2022
- “Sharpe Ratio Formula and Definition With Examples – Investopedia”. https://www.investopedia.com/terms/s/sharperatio.asp. Accessed 7 Nov 2022
Disclaimer
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