If Alphabet, Amazon and Facebook (along with Berkshire Hathaway) paid shareholder dividends at the 2.37% average yield of other S&P 500 companies that do so, it would shake out another $32.2 billion for investors, according to Howard Silverblatt, senior index analyst at S&P Dow Jones Indices. How to choose a smart speaker More: Here's one way Google envisions search changing for you But don't expect these tech companies to pay a dividend anytime soon. "During the 1990s, tech didn't typically pay dividends and they drove the stock market back then," said Kim Forrest, senior equity analyst at Fort Pitt Capital. The S&P tech sector had a dividend yield of 1.36% during the third quarter, the lowest of the 11 sectors and well below the overall S&P 500 of 1.97%, according to Silverblatt.
Instead of preprogramming software to complete a specific task, as narrow AI does, machine learning uses algorithms that allow a computer to learn from the vast amounts of data it receives so it can complete a task on its own. International Business Machines uses deep learning powered by NVIDIA's graphics processing units (GPUs) to comb through medical images to find cancer cells. The company makes the graphics processors that are integral in AI, machine learning, and deep learning, and lots of companies already look to NVIDIA's hardware to make their AI software a reality. The Motley Fool owns shares of and recommends Alphabet (A shares), Alphabet (C shares), Amazon, Facebook, and Nvidia.
This type of personal AI had been introduced previously in the mega-hit movie "Iron Man' with the AI system called "Jarvis." Right now most drones use a joypad/joystick style controls to operate the drone, by contrast, this company is developing its drone (called "ORCA") to utilize open networking/the Internet. Contributing to the crowdfund campaign will allow the development team to fully develop this model so that more people can benefit from AI based drones. In fact, it will allow for AI technology provided by Amazon AWS to be used by drones.
Recently, analyst Trip Chowdhry of Global Equities Research wrote in an investor note that Wal-Mart Stores (NYSE:WMT) will ramp up its focus on deep neural networks for its OneOps cloud business and that the retailer will tap NVIDIA's (NASDAQ:NVDA) graphics processing units (GPUs) to make this happen. Deep neural networks, and the broader deep learning segment, are part of a growing artificial intelligence market. Additionally, NVIDIA said in its second-quarter fiscal 2018 report that it forged new partnerships with Microsoft, Google, Tencent, IBM, Baidu, and Facebook to help them bring new deep learning and artificial intelligence services online. Aside from NVIDIA's deep-learning total addressable market, adding more of these customers is important, because the company's data center revenue segment (which includes GPU sales for deep-learning technologies) is becoming a larger part of the business.
In my view, though impossible to quantify exactly, Amazon's AI investments and capabilities should sustain and increase its competitive advantage over time, leading me to believe that the stock has a much longer runway than what investors are giving it credit for. Looking at Microsoft's Q2 call (CYQ4), Nadella, MSFT's CEO, began by briefly summarizing earnings and then described FY17 as "a tremendous year of customer momentum with Cloud, AI, and digital transformation". In the press release, the only direct mention of machine learning and AI came in bullet number 20: "AWS customers continue to ramp their use of Amazon Machine Learning and Artificial Intelligence services…" Even sell side analysts do not fully appreciate how important AI is to Amazon. For example, in the Q2 earnings call last month, AI was only mentioned towards the end of the call and it came from a sell side analyst: "As you continue to scale operations and you bring data to bear and robotics and Kivas and AI machine learning, are you finding that kind of new fulfillment center optimization curve is accelerating?"
To elucidate the increased pace of AI acquisition further, from 2007 to 2012, acquisitions of AI startups experienced a compounded annual growth rate of 25 percent. Meanwhile, from 2013 to 2016, the compounded annual growth rate of AI startup acquisition nearly doubled to 49 percent. Assuming the pace of acquisition remains steady, a total of 99 AI startups will be acquired by the end of the year, bringing our estimated compound annual growth down to 43 percent. The company has made over one-third of the total number of acquisitions made by the top five AI acquirers in our chart.
This warehouse is meant to replace another one 300 miles further, in order to cut the distance to the customer in half, and deliver goods quicker to households in the region. Using a rule of thumb of last mile shipping making up 50% of total logistics costs (which we determined by evaluating multiple e-commerce companies and speaking with logistics experts), we can estimate that it used to cost $3.50 to deliver from the warehouse to the doorstep. By saving $1.75 per package, this would equate to a total savings of $437,500 by building the warehouse ($1.75 per package x 5 packages per year x 50,000 households). This overlap creates numerous synergies, including collecting more data on the purchasing habits of these types of customers, cross-selling opportunities (since many Whole Foods households are already Prime members), and a higher likelihood of these customers adopting online grocery shopping.
The Global X Robotics and Artificial Intelligence ETF (BOTZ) is up 30 percent this year and the ROBO Global Robotics and Automation Index (ROBO) is up 25 percent. The upward trend in robotics and artificial intelligence stocks is one proponents say, in the long-term, could top the so-called FANG stocks -- Facebook, Amazon.com, Each FANG stock has rallied 20 to 50 percent this year and the companies are increasingly focused on using technologies such as artificial intelligence, or AI, to develop their businesses. That jump in assets under management makes BOTZ the youngest fund in Global X's top 10 largest funds, according to Jay Jacobs, director of research and vice president at Global X Funds. "Google is betting on the right long-term trends (Google, AI, AR, VR)," Munster said in a note from his new firm Loup Ventures, a venture capital firm focused on artificial intelligence, robotics, virtual reality and augmented reality.
In the latest development, Darktrace -- a cybersecurity firm that uses machine learning to detect and stop attacks -- has raised $75 million, giving the startup a post-money valuation of $825 million, on the back of a strong business: the company said it has a total contract value of $200 million, 3,000 global customers and has grown 140 percent in the last year. Notably, Darktrace also separately (not in its funding release) announced today that it is now in a strategic partnership with Hong Kong-based CITIC Telecom CPC, a telecoms firm serving China and other parts of Asia, "to bring next-generation cyber defense to businesses across Asia Pacific." Darktrace is part of the new guard of firms that are built around the concept of using artificial intelligence both to help security specialists identify and stop malicious attacks, as well as act on their own to automatically detect and stop the threats. "After witnessing the power of Darktrace's technology first-hand, CITIC Telecom CPC wanted to share the value of this disruptive AI for cyber defense on a large scale," commented Mr Daniel Kwong, Senior Vice President, Information Technology and Security Services at CITIC Telecom CPC.