Sometimes trends are short-lived, and as a long-term investor, you probably don't want to pay too much attention to them. But certain trends, due to their potential to transform the way things are done for the better, merit a second look -- and even an investment. Today, artificial intelligence (AI) and gene editing both look like this sort of trend, and both have been picking up more and more momentum.
How can you benefit from these game-changing technologies as an investor? You scoop up shares of companies that may either develop them or use them to grow their businesses. They could score a win down the road thanks to these unstoppable trends, and that would translate into a win for shareholders.
Alone, these stocks won't make you rich, but as part of a diversified portfolio they could play an important role and help you get there over the long term. The idea is to invest in these companies today and hold onto them for a decade or more, offering them the time to benefit from these promising trends -- and allowing your investment some time to grow.
Let's check out a top wealth-building AI stock and an exciting gene-editing player to add to your portfolio now.
Image source: Getty Images.
1. Amazon
Most of us know Amazon (AMZN +1.25%) as the e-commerce giant that manages to deliver packages to us quickly, sometimes even on the same day we place the order. And to build up that speed, organize operations in fulfillment centers, and more, the company uses AI.
In fact, Amazon has been using it for a while now, but has stepped up its investments in recent times. In e-commerce, AI streamlines operations, which should eventually lower the company's costs. And the use of AI results in better service to customers, which encourages them to come back, translating into more revenue for Amazon.
The company also has increased investment in AI as part of its cloud computing service, Amazon Web Services (AWS). For example, Amazon Bedrock offers clients a selection of foundation models they can use to build and scale their own generative AI applications. This fully managed service means clients don't have to start from the ground up or manage infrastructure -- a clear plus for many businesses.
NASDAQ: AMZN
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So, AI should help increase profitability at both Amazon's e-commerce and cloud computing businesses over time. In the past, Amazon's share price has generally tracked the movement of earnings, so there's reason to be confident that future earnings growth could lead to share-price gains as well.
2. Vertex Pharmaceuticals
Vertex Pharmaceuticals (VRTX 0.79%) itself isn't a gene-editing specialist. But in recent times, it's partnered with expert CRISPR Therapeutics (CRSP 1.36%), and this relationship is proving to be a winning one.
Gene editing is the fixing of faulty genes responsible for disease, and CRISPR Therapeutics uses a technique called CRISPR/Cas9 gene editing. It involves cutting DNA in a particular location, then allowing a natural repair process to take over. Together, Vertex and CRISPR Therapeutics developed Casgevy, a treatment for blood disorders, and that product recently won the first-ever regulatory nod for a therapy based on CRISPR gene-editing technology.
NASDAQ: VRTX
Key Data Points
Gene-editing products, because they actually repair the genome, could result in functional cures. This would make them extremely popular with doctors and patients, even if treatment processes so far are somewhat heavy. For instance, Casgevy treatment takes several months and involves the collection of blood stem cells, among other steps.
In fact, Vertex considers the technology so promising that it's licensed it for use in its type 1 diabetes (T1D) program. Gene-editing therapies could trigger a new wave of growth for Vertex, starting now with Casgevy. And this could lift earnings and the share price -- along with your portfolio -- over the long haul.
