Exploring Contrarian Investing Opportunities in the Artificial Intelligence Sector
As we bid farewell to the old year and welcome a new one, many investors are reflecting on their portfolios and considering new opportunities. Among those looking to take on a more contrarian position, the artificial intelligence (AI) sector may be worth exploring. While AI has been gaining significant attention and investment in recent years, there are still sectors within this booming industry that are being overlooked by the mainstream.
Understanding the AI Landscape
The AI industry is vast and encompasses various sectors, including machine learning, natural language processing, robotics, computer vision, and cognitive computing, among others. According to a report by MarketsandMarkets, the global AI market is expected to grow from $39.9 billion in 2021 to $190.6 billion by 2025, at a compound annual growth rate (CAGR) of 36.6% during the forecast period.
Despite the impressive growth projections, some sectors within AI are still flying under the radar. These sectors may offer attractive opportunities for contrarian investors looking to capitalize on untapped potential.
Sectors to Watch
1. AI in Healthcare: While AI has been making waves in industries such as finance and retail, its impact on healthcare is often overlooked. According to a report by Grand View Research, the global AI in healthcare market size was valued at $2.1 billion in 2018 and is expected to grow at a CAGR of 41.5% from 2019 to 2026. Applications of AI in healthcare include medical imaging, drug discovery, and patient monitoring, among others.
- Medical Imaging: AI algorithms can help diagnose diseases from medical images more accurately and efficiently than human doctors. For example, Google’s DeepMind Health has developed an AI system that can detect over 50 eye diseases with 94% accuracy.
- Drug Discovery: AI can help identify new drugs and medical treatments by analyzing vast amounts of data. For instance, Insilico Medicine, a biotech company, used AI to discover a new potential treatment for COVID-19 in just 45 days.
- Patient Monitoring: AI can help monitor patients in real-time and alert healthcare professionals to potential health issues. For example, IBM Watson Health’s AI system can analyze patient data to predict and prevent readmissions.
2. AI in Agriculture: AI has the potential to revolutionize agriculture by improving crop yields, reducing water usage, and increasing efficiency. According to a report by MarketsandMarkets, the global AI in agriculture market is expected to grow from $1.1 billion in 2020 to $6.7 billion by 2025, at a CAGR of 31.4% during the forecast period.
- Crop Yield Improvement: AI can help farmers optimize crop yields by analyzing weather patterns, soil conditions, and other factors. For example, Blue River Technology’s See & Spray system uses AI to identify and spray weeds selectively, reducing the use of herbicides and improving crop yields.
- Water Usage Reduction: AI can help farmers optimize water usage by analyzing weather patterns and soil moisture levels. For example, Cropio’s AI system can help farmers predict irrigation needs based on weather forecasts and soil moisture levels.
- Efficiency Increase: AI can help farmers increase efficiency by automating tasks such as planting, harvesting, and monitoring crops. For example, John Deere’s Precision Ag technology uses AI to help farmers optimize their operations.
Impact on Individuals and Society
The rise of AI in these sectors, as well as others, has the potential to bring significant benefits to individuals and society as a whole. For instance, AI in healthcare can lead to more accurate diagnoses, personalized treatments, and improved patient outcomes. AI in agriculture can lead to increased food production, reduced water usage, and more sustainable farming practices.
However, the rise of AI also poses challenges, such as job displacement and privacy concerns. Contrarian investors may see these challenges as opportunities to invest in companies that are addressing these issues. For example, companies that are developing AI solutions to create new jobs or improve worker productivity may be attractive investments.
Conclusion
In conclusion, as we look to the new year, contrarian investors may wish to consider the sectors within the AI industry that are being overlooked. Sectors such as AI in healthcare and agriculture offer attractive opportunities for investors looking to capitalize on untapped potential. These sectors have the potential to bring significant benefits to individuals and society as a whole, but also pose challenges that savvy investors can address through thoughtful investments in innovative companies.
As always, it is important to conduct thorough research and consult with financial advisors before making any investment decisions. By staying informed and taking a contrarian approach, investors may be able to capitalize on opportunities that others may be overlooking.
Sources:
- MarketsandMarkets. (2021). Artificial Intelligence Market by Component, Deployment Model, Organization Size, Vertical, and Region – Global Forecast to 2025.
- Grand View Research. (2021). Artificial Intelligence in Healthcare Market Size, Share & Trends Analysis Report By Component, By Application, By End Use, By Region And Segment Forecasts, 2021 – 2028.
- MarketsandMarkets. (2020). AI in Agriculture Market by Component, Application, and Region – Global Forecast to 2025.
