Artificial Intelligence Stocks: 10 Companies Betting on AI

Artificial intelligence is here to stay.

Reliable, pure-play artificial intelligence stocks are tough to find in this day and age. Plenty of blue-chip companies understand how vital AI will be in the future, but because it's such a nascent area, other parts of their business are still the real moneymakers. That's OK, though. While the following 10 companies might not be pure AI plays, many of them may be close to that level in just a few years as machine learning and deep learning become more sophisticated, useful, and impactful. Each following company is betting big on AI, and many of them are relying on artificial intelligence in important parts of their business already.

Facebook (ticker: FB)

Facebook aims to build the "best AI lab in the world," where today's top tech talent can solve the most challenging issues in the field. Its research has already paid off -- Facebook has an AI-powered personal assistant, M, and facial recognition features that can sort, recognize, and tag entire groups of friends. M, offered within Facebook Messenger, can already perform a number of useful tasks like booking flights and contesting cable bills, as well as some not-so-useful ones like drawing very amateur-looking sketches. Still, Facebook, which began in a Harvard dorm room in 2004, is now without a doubt one of the top artificial intelligence stocks in the world.

Amazon.com (AMZN)

Amazon might traditionally be considered a hybrid between a retail and tech stock, but in time, "AI company" may be the most honest descriptor. Amazon's Echo home speaker comes equipped with Alexa, an AI-powered virtual assistant that can recognize and answer questions, read news stories, read audiobooks, read the weather forecast, play music from Amazon Prime Music, Spotify, and Pandora, and of course order a lot of Amazon products. Alexa gets smarter every day, too -- 1,500 new features and skills have been added through software updates since its late-2014 release. With millions of Echos in circulation, it's one of the most successful consumer-facing AI products on the planet.

Alphabet (GOOG, GOOGL)

Alphabet is in many ways a quintessential AI company: Google search itself is partially powered by RankBrain, a deep learning technology that helps Google better understand queries and deliver relevant responses. On top of that, Google now has its own answer to the Amazon Echo, dubbed Google Home; its driverless car technology is powered by machine learning, and a Google-owned machine named AlphaGo beat the world champion in Go, an ancient, complex Chinese strategic board game, back in March. AlphaGo's win was a victory for artificial intelligence as monumental (if not more monumental) than IBM's 1997 chess triumph over Garry Kasparov.

Apple (AAPL)

Apple's Siri virtual assistant software can do quite a lot: It can tweet and text on command, set a timer or alarm clock, make reservations, calculate one's caloric intake, and, soon, hail an Uber. Considering Apple is rumored to be working on its own electric, autonomous vehicle, and it may well decide eventually to put those cars on the streets and look for fares, there's a chance the seamless integration with Uber will be temporary. On Apple's flagship product, the iPhone, some modest AI is already going on behind the scenes. Facial recognition in photos and suggested responses to texts are two examples -- besides Siri -- of in-phone AI.

Microsoft Corp. (MSFT)

Microsoft also acknowledges the value of artificial intelligence -- and is betting on it accordingly. It recently acquired SwiftKey, which analyzes data to predict what a user is typing and what they'll type next, for a reported $330.2 million. Since SwiftKey uses AI to do this, Microsoft also bought SwiftKey's intellectual property and expertise. Microsoft is also wagering on a future heavy on chatbots, which will understand natural language and should dramatically increase the utility and functionality of mobile devices. There's still a lot to learn, though: Microsoft's Twitter (TWTR) chatbot Tay had to be taken down after a day when it began imitating hate speech users directed its way.

Nvidia Corp. (NVDA)

In many ways, Nvidia is the most pure-play artificial intelligence company on this list. The chipmaker decided early in the game to invest heavily in advancing the AI field by building chips tailor-made for deep learning. Its most recent AI-centric chip, the Tesla P100 GPU, cost $2 billion to develop and can work 12 times faster than Nvidia's previous top-of-the-line model. That's a major investment for a company with $5.16 billion in revenue over the last year, but if it continues building out its lead and forces larger rivals like Intel Corp. (INTC) to play catch up, it may reap huge rewards for shareholders.

International Business Corp. (IBM)

IBM's Watson is one of the most recognizable names in artificial intelligence. Walloping two of the best "Jeopardy!" players of all time put Watson on the map, but IBM has much more practical -- and profitable -- plans for how to make the best of Watson's deft data skills. Watson can read 40 million documents in 15 seconds, understanding grammar and context throughout, and can then answer multi-part questions on the material. It can help businesses analyze vast amounts of data, determine if there are problems, how to solve them, and where opportunities lie. In health care, IBM says Watson can see previously hidden data, improving quality and efficiency.

Baidu (BIDU)

China search giant Baidu aims to use AI in much the same way that Alphabet does. It's reportedly planning to partner with a Chinese tourism company to test its driverless car technology soon. Baidu is also developing technology to automatically caption videos, recognize objects in a picture, and, unsurprisingly, answer natural language queries. Baidu, which has 663 million mobile monthly active users, is currently working on developing "AI technologies that we believe will have a significant impact on the lives of at least 100 million people" in its Silicon Valley AI lab.

Boeing Co. (BA)

Tech companies aren't the only ones trying to harness artificial intelligence for commercial benefit. In 2015, aerospace giant Boeing inked a $7.5 million deal with Carnegie Mellon University to create the Aerospace Data Analytics Lab, which will use machine learning to churn through data and discover new industry insights. Boeing hopes that the partnership can show the company how to more efficiently design, build, and maintain planes, which could not only cut costs and increase output, but increase the selling price of the planes themselves. Imagine an aircraft that knows -- by amalgamating data points generated by thousands of sensors -- when it's about to need a repair.

Tesla Motors (TSLA)

Elon Musk doesn't elicit comparisons to Leonardo da Vinci by relying on the technologies of yesteryear. The Musk-founded Tesla Motors is investing heavily in artificial intelligence, which is already at work in its vehicles. Teslas can now drive themselves on the highway, park themselves, and understand certain voice commands. Tesla is currently hiring for the role of computer vision scientist, someone who will help the company develop "full scene understanding, general object detection and classification," and "human intention direction." While there was a fatal May accident involving a driver using Tesla's Autopilot self-driving mode, Tesla's autonomous technology is still pretty good -- it was the first Autopilot fatality in 130 million miles.

John Divine is a staff writer for U.S. News & World Report. He is also a longtime investor, and has previously written about investing and the markets for InvestorPlace and The Motley Fool. You can follow him on Twitter @divinebizkid or give him the Tip of the Century at jdivine@usnews.com.