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Machine Learning (“ML”) is being integrated into everything, starting from business needs to consumer needs in the Artificial Intelligence (AI)-driven world.

The growing proliferation of ML in cloud computing solutions, quantum computing systems, automation, robotics, leading-edge medical diagnostic systems, autonomous vehicles, and smart consumer electronic appliances, to name a few, has created a unique niche for the technology.

Notably, the futuristic technology is being leveraged by companies across various sectors to make enterprise functions leaner and more efficient.

Effective algorithms, frameworks, and techniques of ML, which solve complex problems quickly, are expected to continue bolstering its adoption rate in the near term as well as the long run.

Looking at this, technology behemoths such as Alphabet’s (GOOGL - Free Report) Google, Amazon (AMZN - Free Report), Microsoft (MSFT - Free Report), and International Business Machines (IBM - Free Report) are undertaking strong efforts to achieve breakthroughs in the ML arena.

ML to Remain Promising in 2021 & Beyond

We note that the Coronavirus pandemic-induce automation in businesses has triggered the use of ML.

Moreover, the emerging megatrend in the IT industry namely hyper-automation, which states that almost everything in a business can be automated, is likely to gain popularity. This, in turn, is expected to accelerate the deployment rate of ML models in IT firms.

Additionally, boosting customer experience and personalization in the retail industry is likely to be the key rationales behind the adoption of ML in 2021.

Further, the growing proliferation of Internet of Things (IoT) devices, the increasing adoption of Machine Learning as a Service (MLaaS), the rising demand for faster computing power, and the emergence of reinforcement learning are paving the way for an ML boom in 2021 and beyond.

Per the data provided by Grand View Research, the ML market is expected to hit $96.7 billion by 2025, witnessing a CAGR of 43.8% between 2019 and 2025.

Per a report from Mordor Intelligence, the global MLaaS market is expected to see a CAGR of 43% between 2020 and 2025.

Year-to-Date Price Performance

3 ML Stocks for a Profitable 2021 Portfolio

Here we picked three companies, which are well-poised to capitalize on the ML prospects. Notably, each of the following stocks has outperformed the S&P 500 index on a year-to-date basis.

Baidu (BIDU - Free Report) is one of the most advanced China-based AI companies. It also holds a number of patents in autonomous driving. The company’s Apollo technology is gaining strong traction in the self-driving car space.

Its other ML projects like virtual assistants and voice replication are making notable progress. The company’s ML algorithms, voice and image recognition software, and natural language processing are offering more personalized results to users.

Additionally, this Zacks Rank #1 (Strong Buy) company’s initiative to integrate ML with its ongoing innovation in augmented reality remains a major positive. Further, Baidu’s home robot— Little Fish, based on advanced ML capabilities —is noteworthy.

Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 3% to $10 over the past 60 days.

Alphabet’s division Google remains one of the notable tech giants on the heels of its strengthening ML solutions portfolio.

The company’s cloud computing arm, Google Cloud, is continuously gaining solid momentum with the support of its robust ML solutions. Its Document AI solution, which is backed by ML, helps in analyzing documents efficiently. Further, its advanced and reliable cloud infrastructure, which supports the deployment of ML models and smooth functioning of ML workflows, is a major positive.

Apart from cloud computing, the company has been exploring ways to infuse ML techniques in the process of drug discovery. Recently, it demonstrated a virtual screening method, based on graph convolutional networks, which is expected to be a breakthrough in the pharma industry.

Further, Alphabet, which currently carries a Zacks Rank #2 (Buy), has been a frontrunner in the autonomous driving space on the back of its Waymo vehicles, which are highly powered by the ML technology.

Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 1.2% to $62.30 over the past 60 days.

Tencent Holdings (TCEHY - Free Report) is 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, Tencent’s open-sourced project on distributed ML platform, Angel, based on a parameter server framework, holds promise.

Notably, the Zacks Consensus Estimate for the company’s 2021 earnings has moved north by 4.8% to $2.39 over the past 60 days.