One of the best places to look for investment returns is where the wind is blowing. In other words, find sectors that are producing growth and will keep growing, even if the economy stalls. Artificial intelligence could be one of those industries to look at.
Here are three ASX shares with exposure to this theme:
Appen Ltd (ASX: APX)
Appen describes itself as a global leader in the development of high-quality, human-annotated training data for machine learning and artificial intelligence.
It collects and labels image, text, speech, audio, and video data used to build and continuously improve the world’s most innovative artificial intelligence systems at some of the world’s biggest tech companies.
Appen points to the fact that a recent forecast shows that the annual global revenue for artificial intelligence products and services will grow from $643.7 million in 2016 to $36.8 billion by 2025. This seems like a very strong tailwind to me.
The recent Figure Eight acquisition diversifies Appen’s customer base, creates synergies for both businesses and provides growing annual recurring revenue.
It’s looking a bit cheaper than in recent months with the share price down almost 20% since the end of July.
ETFS ROBO Global Robotics and Automation ETF (ASX: ROBO)
History has shown that it’s hard to pick one particular business that will do well out of a group of potential targets, so why not just invest in the entire group? This exchange-traded fund (ETF) aims to give exposure to robotics, automation and AI companies. It has an annual management fee of 0.69%, which is pricey, but cheaper than many active fund managers.
The ETF’s largest positions, which are all have less than a 2% weighting in the ETF, are ones like NVIDIA, Hiwin Technologies, Zebra Technologies, Faro Technologies, YASKAWA Electric, Harmonic Drive Systems, Intuitive Surgical and Rockwell Automation.
Over the past five years, the index which this ETF is tracking has delivered an average return per annum of 15% – but past performance is not a guarantee of future performance.
Livetiles Ltd (ASX: LVT)
LiveTiles is a tech company which provides various workplace tools on a platform for Office 365, Azure and SharePoint. It utilises analytics and productivity bot assistants to get the best out of people and automate tasks.
It’s gaining rapid traction with organisations in Australia, Europe and North America, whilst getting more exposure at many Microsoft events which showcase the LiveTiles offering.
The business continues to grow strongly – revenue was up 218% to $18 million in FY19, but the share price is down 36% since July. This could be an opportunistic time to take up a small position.
Each of these businesses have plenty of growth potential through utilising technology and AI. At the current prices I’d probably be more inclined to go for LiveTiles because it’s earlier on in its growth journey, but Appen could also be a good idea compared to the higher-priced ASX tech shares.