robot artificial intelligence AI

  • Artificial intelligence is developing rapidly, and creating plentiful investment opportunities in its wake.
  • HSBC breaks down the areas to watch in the AI space, focusing not just on software, but also hardware on equipment.

The robot revolution is coming. The question for stock investors is — are you prepared?

After all, artificial intelligence (AI) will eventually decide life-shaping things like whether we’re insurable or have medical coverage, while also hugely impacting transportation and resource infrastructure, says HSBC.

That development is likely to carry with it major money-making opportunities. The trick is figuring out which corporations stand to benefit most.

“Companies that are early adopters of AI into their business may benefit from the first-mover advantage, increased productivity, reduced costs and potentially greater market shares,” a group of HSBC global equity strategists led by Ben Laidler wrote in a client note.

The firm notes that automation and AI are one of the most under-owned thematic plays. In other words, there’s upside waiting for investors savvy enough to grab it.

The chart below shows just how many billions of dollars are set to be unlocked in the coming years — and highlights the specific areas that will generate that growth.

Screen Shot 2018 01 09 at 8.43.33 AM

In order to help in the stock selection process, HSBC has identified three primary categories — areas that focus on the hardware components and technology needed to support AI. This is where the firm thinks there’s ample opportunities — not necessarily just in software, but also in machinery and tools.

Here are the group (all rationale from HSBC):