Artificial intelligence will create a $14 trillion opportunity by 2030 with the help of these two stocks.

This year brought windfalls for several AI companies and startups. For example, the launch of OpenAI’s ChatGPT and the rapid expansion of its base, which reached nearly 100 million active users in January, created intense competition in the technology sector to rapidly commercialize AI capabilities. Interestingly, Ark Investment Management’s Big Ideas 2023 report claims that it is possible for AI software to generate up to $14 trillion in revenue by 2030.

For all the excitement retail investors face, it seems best that they take a step back and instead learn how to separate fiction from reality in these areas. For example, it does not make sense to bet on companies whose AI projects and technologies are not yet proven. On the contrary, with collective imagination, you can invest in companies with proven AI technologies and thus benefit from the $14 trillion AI revolution.

With that in mind, it’s easy to see why Microsoft (MSFT -0.85%) and Intuitive Surgical (ISRG 0.25%) could prove to be top AI stocks for long-term investors. You will find more information below.

Microsoft

The reality is that Microsoft was best establishing itself as a major cloud infrastructure provider back then when it was widely known for offering good office software and industry-leading applications like Word, Excel, and Powerpoint. Microsoft Azure accounted for 23% of the global cloud infrastructure services market share in the first quarter of 2023, up two percentage points from the third quarter of 2022, according to Synergy Research estimates.

It can be said that the partnership with OpenAI allowed Microsoft to focus on strengthening its offerings by adding generative AI capabilities. That’s why the integrated version of ChatGPT launched its Bing search engine, which is sure to penetrate the Internet search market. After that, the company integrated AI tools into its office suite to improve productivity and user experience. As a result, Microsoft’s Azure cloud platform now offers customers a range of services, including AI-as-aa-Service (AI-as-aa-Service) access solutions, to enable AI and Start your car.

Notably, Microsoft’s recent quarterly performance (ended March 31, 2023) gave everyone hope, as it is still unclear how much AI capabilities are actually monetizing. Accordingly, the company’s revenue rose 7% annually to $52.9 billion, driven by significant growth in AI-based areas such as cloud and productivity and business processes. On the other hand, its net income also increased by 9% compared to last year and reached 18.3 billion dollars.

Currently, the Microsoft giant is trading at 33 times earnings, which is significantly higher than the Nasdaq Composite’s price-to-earnings (P/E) ratio of 20.5. Microsoft is a very profitable company that returns significant value to shareholders in the form of dividends and share buybacks, and it is at the forefront of the ongoing AI revolution. For this reason, we can boldly say that choosing this company will be a smart choice.

Intuitive Surgical

It’s no secret that American medical device company Intuitive Surgical is a leader in the robotic-assisted surgery space. DaVinci Intuitive Surgical’s surgical platform uses the power of artificial intelligence and machine learning to analyze its data. This helps surgeons improve preoperative planning as well as intraoperative decision making, which in turn leads to better patient outcomes. The company plans to use AI for a range of other activities, such as training medical students and residents.

Also, with the company’s recent $12.9 million investment in the Kela Health platform, which uses artificial intelligence to reduce surgical complications, its artificial intelligence capabilities will undoubtedly be added to the medtech space. In fact, the company has reported strong results in the first quarter of this year, despite issues with foreign exchange and disruptions related to COVID-19, which saw the company grow 12% year-over-year. .

Currently, Intuitive Surgical trades at nearly 82 times earnings, while the major U.S. stock market index trades at 74. This valuation seems to be justified. At the same time, this company’s robotic surgery system based on artificial intelligence also benefits from high switching costs. Hence, with Intuitive Surgical well positioned to maintain its good position in the market for years to come, investors can count on this stock.