Artificial Intelligence relies on huge amounts of data to recognize patterns and infer when it finds new information, referring back to the information it was originally trained with. Thus, it is data processing that is specifically based on the thinking of humans.
Generative AI is already being used in various business sectors. Marketing, advertising, digital art, video games, and legal contract drafting are some of the areas where AI is developing its potential. So much so that, for many, doubts have arisen about the possibility of this technology replacing the work of humans.
In the short term, it is complicated to think about such a radical change, and in the long term, it is difficult to predict what will happen. To know what to expect in the future, it is necessary to refer to the numbers, which indicate that Artificial Intelligence has become a significant economic driver.
By the end of this year, total spending on AI systems is expected to reach $97.9 billion, a 161% increase over the $37.5 billion spent in 2019. Being such an amazing value, it will surely open up opportunities for investors willing to take a closer look.
It is so, two companies are involved in this great moment that AI is going through due to the good use they have given it, and the performance of their shares sees this positivity reflected. Specialists give a “Buy” rating to the shares of these two companies, so a deeper analysis of both is necessary.
The name Adobe is immediately associated with PDF documents. This is something that has helped the company grow over the years and with which it has created other services such as Adobe Creative Cloud, which provides development tools such as Photoshop, Illustrator, and InDesign.
With Artificial Intelligence, Adobe developed the Adobe Sensei platform. In it, it offers AI and machine learning features across its product range. Sensei helps to clear all the doubts and facilitates all the development processes with a customer experience suitable for everyone.
The Sensei platform uses a combination of AI and machine learning, so now there is the facility to make perfect products targeted in a better way in marketing. These AI features in Adobe have greatly impacted the work of content creators because they have more efficiency and can meet shorter deadlines.
This caught the attention of Alex Zukin, a five-star analyst at Wolfe Research, and he sees Adobe’s AI development as great news for the company. “From a monetization standpoint, Adobe has several opportunities. Most importantly, given Adobe’s position in the market, all the generative AI platforms want to partner with the company and create plug-ins for Creative Cloud. Adobe will build on this and allow all current and future tools to integrate directly so that subscribers can even contribute their models,” he said.
The US company has already been working with generative AI for several years, has developed models of its own, and has a more highly trained team of researchers than other companies in this sector. This is a plus for Adobe, and according to Zukin, “it’s stock to own in 2023.”
Adobe’s stock is likely to outperform the market, which is why Zukin gives it a “Buy” rating. The stock has an average price target of $380.95, implying a 13% upside from the current price of $338.37.
Shutterstock is a platform frequently used by graphic designers, marketing professionals, and digital creators because it has around 400 million royalty-free images in its library.
Over the past few months, the company reported several initiatives that will give a more prominent role to generative AI, as well as partnering with other companies to get more out of this technology. In November, it announced a joint venture with LG AI Research to train LG’s AI system using Shutterstock’s vast collection of images and metadata. The “supergiant” AI they are developing is called EXAONE, and will be able to generate images or captions based on the library and texts behind them.
Adding to that, Shutterstock announced in January that it will collaborate with Meta on AI investment. With Shutterstock’s huge media library, Meta will be able to expand its AI and machine learning capabilities.
However, this was not Shutterstock’s most relevant announcement during the year’s first month. The company unveiled its AI-powered image generation platform, available to all clients and in any language. The platform uses technology that converts text to images and can be found as part of the Creative Flow toolset.
Shutterstock’s moves regarding AI have not gone unnoticed among specialists. “Although currently contributing little to revenue, generative AI continues to gain traction. The most important thing we learned about generative AI is that the deals have a recurring revenue stream, which gives us confidence that Shutterstock will be able to benefit from this seeming megatrend for several years to come… We believe Shutterstock [has the] ability to continue to grow in its core content market while creating two additional growth engines that could ultimately be larger than its core content market,” said Bernie McTernan, an analyst at Needham.
The rating handed out by specialists to Shutterstock stock is “Moderate Buy.” The stock is selling at $72.61 and the average price target of $87 suggests an upside of about 20% over the next 12 months.
A future without AI is unimaginable today. Everything points to the fact that technology will evolve and this tool will become indispensable for certain types of businesses.
What’s your take? Would you invest in any of these companies that are working with AI?
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(Information in this post is for general informational purposes only. It cannot and should not be considered as suggestions or recommendations regarding investing or financial decisions.)