The buzz was there for years; artificial intelligence is the next big thing, but as usual, when it comes to technology innovation, the opening salvos from private equity and others took quite a while to catch up with reality.
That all changed in late 2022 with the introduction of OpenAI’s Chat GPT, and then the company offered expanded access to OpenAI’s DALL-E 2 AI image and art generator.
The brave new world now has almost unlimited potential and possibilities for machine learning, intelligent applications and appliances, autonomous vehicles, and robotic applications. Numerous companies stand to benefit from the technological advances that AI will provide, and those who don’t use the technology in the coming years will surely regret it.
As usual, big mega-cap technology companies are likely to benefit first, as they have been embracing the onslaught of AI applications for years.
Broadcom
This stock has rallied back nicely, and Wall Street continues to like the company for dividend growth and the current 1.69% yield. Broadcom Limited (NASDAQ: AVGO) has an extensive semiconductor product portfolio that addresses applications within the following end markets:
- Wired infrastructure
- Wireless communications
- Enterprise Storage
- Industrial
Applications for Broadcom’s products in these end markets include:
- Data center networking
- Home connectivity
- Broadband access
- Telecommunications equipment
- Smartphones
- Base stations
- Servers
- Storage
- factory automation,
- Power generation
- Alternative energy systems
- Displays.
Reports have indicated that Broadcom has developed some exciting mechanisms to address the challenges of building an Ethernet-based fabric that supports AI workloads.
These mechanisms, which include a scheduling framework, cells, and credits, are intended to minimize congestion, latency, and dropped frames or packets in the fabric. Broadcom builds an Ethernet fabric optimized for AI using its Jericho3-AI and Ramon ASICs.
Cisco
This is a mega-cap tech leader for more conservative accounts that pays a solid 3.15% dividend. Cisco Systems, Inc. (NASDAQ: CSCO) designs, manufactures, and sells Internet Protocol (IP) based networking products and services related to the worldwide communications and information technology industry.
Cisco provides switching products, including:
- Fixed-configuration and modular switches and storage products that provide connectivity to end users, workstations
- IP phones
- Wireless access points, and servers
- Next-generation network routing products that interconnect public and private wireline and mobile networks for mobile, data, voice, and video applications
Cisco cybersecurity products give clients the scope, scale, and capabilities to keep up with the complexity and volume of threats. Putting security above everything helps corporations innovate while keeping their assets safe.
The company offers Cisco AI Assistant for Security, which provides AI-powered capabilities that allow cybersecurity teams to run at machine speed so they can focus on what’s critical.
Cisco’s solutions can use autonomous actions to learn from human-to-machine interactions to automate complex playbooks. AI assistance puts control in companies’ team hands, allowing them to simplify management and improve outcomes.
Intel
This semiconductor legacy leader has been hammered, and while some feel it’s a value trap, the stock pays a 1.17% dividend. Intel Corp. (NASDAQ: INTC) designs, manufactures and sells integrated digital technology platforms worldwide. It operates through Client Computing Group, Data Center Group, Internet of Things Group, Software and Services, and All Other segments.
The company’s platforms are used in various computing applications comprising:
- Notebooks
- 2 1 systems
- Desktops
- Servers
- Tablets
- Smartphones
- Wireless and wired connectivity products
- Wearables
- Retail devices
Manufacturing devices, for retail, transportation, industrial, buildings, home use, and other market segments.
Intel’s portfolio of AI-enabling hardware and software – from CPUs, GPUs, and accelerators to the one API programming model.
OpenVINO developer toolkit, and libraries that empower the AI ecosystem – provides competitive, high-performance, open-standards solutions for customers to deploy AI at scale quickly.
International Business Machines
This blue chip legacy tech giant still offers investors a solid entry point and a 3.62%% dividend. International Business Machines Corporation (NYSE: IBM) is a leading provider of enterprise solutions, offering a broad portfolio of IT hardware, business and IT services, and a full suite of software solutions. The company integrates its hardware products with its software and services offerings to provide high-value solutions.
IBM comprises five major segments:
- Cognitive Solutions
- Global Business Services
- Technology Services & Cloud Platforms
- Systems
- Global Financing
The company posted an excellent fouurth quarter, as the cloud proved significant in the earnings reports, as did Red Hat, the software giant the firm bought in 2019.
Red Hat’s open hybrid cloud technologies are now paired with the unmatched scale and depth of IBM’s innovation, industry expertise, and sales leadership in more than 175 countries.
An AI and supercomputer pioneer with Watson, the company moved away from past projects in 2022 but has vowed to invest 20 billion over the next decade to develop and manufacture semiconductors, mainframe computers, and AI and quantum computing technology.
Marvell Technology
This chip maker is probably well under the AI radar but possibly a big winner and pays a smaller 0.36% dividend. Marvell Technology, Inc. (NASDAQ: MRVL) together with its subsidiaries, provides data infrastructure semiconductor solutions, spanning the data center core to the network edge.
The company develops and scales complex System-on-a-Chip architectures, integrating analog, mixed-signal, and digital signal processing functionality.
The company offers Ethernet solutions, including:
- Controllers
- Network adapters
- Physical transceivers, and switches
- Single or multiple core processors
- Custom application-specific integrated circuits
- System-on-a-Chip solutions
Marvell Technology also provides electro-optical products, including:
- Pulse amplitude modulations
- Coherent digital signal processors
- Laser drivers, trans-impedance amplifiers
- Silicon photonics
- Data center interconnect solutions
- Fiber channel products comprising host bus adapters and controllers
- Single or multiple core processors; storage controllers for hard disk drives and solid-state-drives
- Host system interfaces, including serial attached SCSI, serial advanced technology attachment, peripheral component interconnect express, non-volatile memory express (NVMe), and NVMe over fabrics.
The company is modeled a $400 million in AI sales this year in 2024 and $800 million in 2024. Computing and AI applications have become Marvell’s cloud-optimized silicon platform’s most significant revenue drivers and opportunities.
Artificial Intelligence is here to stay, and there will continue to be heated discussion of the industry’s pros and cons and the multitude of applications and solutions that can and will be provided.
Elon Musk founded OpenAi in 2015, left the board in 2018, and has cut ties with the company. He has had harsh words from some of the “woke” issues arising from the technology and just released his own “anti-woke” AI to rival the company. That proves that we are still in the formative years, and big money will be made in the future.
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