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The Zacks Analyst Blog Highlights: Microsoft, Applied Materials, SAP SE, Lam Research and Tencent

Zacks Equity Research

For Immediate Release

Chicago, IL – February 20, 2020 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include:Microsoft MSFT, Applied Materials AMAT, SAP SE SAP, Lam Research LRCX and Tencent Holdings TCEHY.

Here are highlights from Wednesday’s Analyst Blog:

5 Top-Ranked Tech Stocks to Gain from Advanced ML Capabilities

Machine learning (ML) requires no introduction in this data-driven automation era. ML, an inextricable application of artificial intelligence (AI) arena, enables systems to utilize existing data to predict outcomes and identify trends, and enhance business operations from experience.

ML domain is set to witness breakthrough developments in natural language processing or NLP, computer vision, conversational AI, to mention a few, through 2020.

Talking about recent NLP and conversational AI developments, researches are focusing on enhancing smartness of chat bots and social bots with varied responses and emotion recognition capabilities, by utilizing advanced ML-driven pre-trained language models.

In computer vision, Alphabet’s Google Research team has unveiled a new approach to assess depth prediction. Facebook’s AI Research team has also come up with a solution for 3D object detection in point clouds.

Moreover, growing proliferation of cloud-based technologies is facilitating growth of Machine Learning as a Service (MLaaS) market. Major cloud players, including Amazon, Microsoft and Google offer MLaaS services to customers. Notably, MLaaS services including Amazon Personalize, Amazon Machine Learning, Azure Machine Learning and Google Cloud AI are witnessing traction.

These developments in ML are leading to robust achievements in futuristic technology, including the training of advanced driver assisted systems (ADAS) in self-driving vehicles, increased AR/VR utilization across enterprise, healthcare, and entertainment, edge computing, blockchain, and even advanced warfare devices.

Growth Projections for ML Instill Optimism

Per the data provided by Grand View Research, ML market is expected to hit $96.7 billion by 2025, witnessing a CAGR of 43.8% between 2019 and 2025. Moreover, according to a report from Mordor Intelligence, global MLaaS market is expected to see a CAGR of 43% between 2020 and 2025.

Companies including tech startups to diverse multinationals are leaving no stone unturned to advance ML and AI capabilities with an aim to gain a competitive edge in the broader AI market.

In fact, per IDC, spending on AI systems is expected to hit $97.9 billion by 2023 from $37.5 billion estimated in 2019, at a CAGR of 28.4% between 2018 and 2023.

The companies are leveraging ML to design robust applications, which are revolutionizing broader working trends of various domains, including supply-chain optimization, customer care services, logistics, transportation, healthcare, security, utility, defense, financial services and banking, robotics, and agriculture.

Here are a few top-ranked tech companies filtered by using the Zacks Stocks Screener, which are well poised to gain from ML-driven advancements or have been supporting the deployment of ML for their clients.

One Year Price Performance

Microsoftis well poised to gain from increasing penetration of ML expertise across its product portfolio, including Office 365, Dynamics 365, HoloLens and Azure. The company’s GitHub acquisition, which enriched the company’s ML capabilities, is a key catalyst in this regard.

Moreover, Microsoft, currently flaunting a Zacks Rank #1 (Strong Buy), offers ML-based ML.NET open-source cross-platform, Azure Machine Learning service, AutoML tools, Cognitive API Services, Azure Machine Learning Studio, to name a few. With these solutions, the tech giant attempts to democratize the use of AI and ML.

Notably, the Zacks Consensus Estimate for earnings for fiscal 2020 has improved 5.2% to $5.64 over the past 30 days.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Applied Materialsis applying ML in semiconductor fabs to enhance automated defect analysis.

The company, currently sporting a Zacks Rank #1, has developed an automated defect classification technology that utilizes different imaging techniques to identify and eliminate defects in chip manufacturing.

Moreover, the company's commitment toward development of new AI and ML powered computing materials and designs, hold promise.

The consensus mark for its earnings for fiscal 2020 has improved 8.7% to $4.10 over the past 30 days.

SAP SEis harnessing the power of ML to enhance enterprise applications. This, in turn, is enabling the company to bolster adoption of its solutions and provide clientele with data-driven business insights.

Moreover, with SAP Machine Learning and SAP Leonardo Machine Learning, this company, currently flaunting Zacks Rank #1, offers platforms that aid enterprises and users develop robust ML tools in the cloud.

Long-term earnings growth rate for SAP is currently pegged at 9.6%.

Lam Researchis leveraging ML to facilitate auto-maintenance of etch process modules, which reduces downtime and improves productivity. Otherwise, etch process modules are required to be cleaned on a weekly or monthly basis to maintain steady performance.

The company, currently carrying a Zacks Rank #2 (Buy), is also benefiting from growing clout of its SABRE 3D electroplating system across packaging customers.

The Zacks Consensus Estimate for earnings for fiscal 2020 has improved 10.6% to $16.82 over the past 30 days.

Tencent Holdingsis integrating ML and AI expertise including data protection and anti-fraud identity authentication capabilities, in streaming, security software, and other services. This is enabling the company, currently carrying a Zacks Rank #2, to expand clientele across finance, media, education and e-commerce verticals.

Additionally, the company’s open-sourced project on distributed ML platform, Angel, based on parameter server framework, holds promise.

Long-term earnings growth rate for Tencent is currently pegged at 21%.

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Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.


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