From better data analytics and decision-making to profit-boosting productivity and efficiency gains, the potential benefits of artificial intelligence (AI) are enormous.
The following companies are helping their customers harness the power of AI -- and they're set to deliver wealth-building returns to their investors along the way.
Meta Platforms
AI and advertising go together like peanut butter and jelly. As the leading provider of social media-based ads, Meta Platforms (META 3.77%) stands to profit handsomely from the growth of artificial intelligence-driven digital marketing campaigns.
NASDAQ: META
Key Data Points
With an incredible 3 billion daily active users across its family of apps -- which includes Facebook, Instagram, WhatsApp, and Messenger -- Meta has a treasure trove of data that it uses to target its ads. It's a lucrative business that helped Meta generate a whopping $32 billion in revenue and $7.8 billion in net profits in the second quarter. Those figures were up 11% and 16%, respectively, from the prior-year period.
Meta is investing aggressively in AI to fuel its long-term profit growth. Its efforts are already bearing fruit. AI is improving Meta's content recommendations, which contributed to a 7% increase in the time users spent on Facebook.
Meta is also using AI to boost its ad-creation, targeting, and forecasting tools. It created AI Sandbox, which marketers can use to test new generative AI-powered image-editing tools. Meta Advantage, the company's automated ads offering, uses machine learning to optimize ad campaigns. And Meta Lattice deploys powerful AI models to better predict an ad's performance.
By helping its customers earn higher returns on their ad spend, Meta stands to capture a larger share of a global digital advertising market that's set to grow from roughly $600 billion in 2023 to over $870 billion by 2027, according to eMarketer. Investors who buy shares of Meta today can position themselves to profit alongside this ad services and AI titan.
Mastercard
Mastercard (MA +0.04%) has long benefited from powerful trends. The growth of e-commerce and mobile payments, as well as the broader shift from cash to digital transactions, should continue to fuel this financial technology leader's expansion for many years to come.
Now, Mastercard has its sights set on becoming an AI powerhouse, by using cutting-edge tech to make it faster and safer for its customers to conduct business.
NYSE: MA
Key Data Points
Mastercard is already incredibly profitable. With over 3 billion credit and debit cards issued by its banking partners, the fintech giant processed a staggering $2.3 trillion in payment volume in the second quarter alone. In the process, it earned $2.8 billion in net profits. That's up 25% from the prior-year period.
Mastercard's AI initiatives should bolster its earnings power in the coming years. Machine learning technology is improving the company's ability to thwart payment scams. Mastercard says that its AI-driven cybersecurity tools have already prevented more than $35 billion in fraud losses.
The payments giant is also using AI to combat the even bigger problem of people having their valid charges incorrectly declined. False declines aggravate shoppers and cost merchants over $100 billion in lost sales in the U.S. alone. The ability to self-learn from real-time data makes AI more accurate and faster than traditional rule-based fraud-detection systems. Thus, more legitimate transactions get authorized, leading to happier consumers and higher sales for merchants.
Mastercard's AI expertise should only grow in importance as more commerce shifts online and cyber scams become more sophisticated. This crucial ability to prevent fraud without comprising transaction speeds should make Mastercard an even more valuable business in the years ahead.
