Artificial intelligence has changed many industries and expanded business and communication capabilities. Large language model-powered tools like ChatGPT grabbed the international spotlight for their ability to easily process queries and produce lengthy paragraphs on a variety of topics.
While ChatGPT represents a bold step forward for artificial intelligence, the technology has been present in more subtle ways long before the tool’s introduction. Artificial intelligence allows companies like Amazon.com Inc. (ticker: AMZN) to recommend products from its deep inventory based on your search history, for example. Alphabet Inc.’s (GOOG, GOOGL) YouTube uses artificial intelligence in a similar way to keep people on its platform. Advertising companies also use artificial intelligence to determine optimal ad placements.
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Artificial intelligence has also played a big role in education. The technology gives students and teachers more choices that can lead to better learning experiences.
“One of the most significant ways that AI is impacting education is through personalized learning. AI-powered systems can collect and analyze vast amounts of data about students, including their academic performance, learning preferences and interests,” states Ayman Abdel-Rahman, CEO of e-book platform Kotobee. “This data can then be used to create personalized learning plans for each student, ensuring that they are getting the instruction they need to succeed.”
Artificial intelligence can lead to more positive outcomes for students if it is used responsibly. While students seem poised to benefit, they’re not the only ones who might win from artificial intelligence in education. Brian Prince, CEO of TopAITools.com, says this technology can also help teachers.
“In the same way AI helps marketers, business owners and creatives by taking care of some of the legwork and helping in brainstorming or outlining, it can aid teachers in specific administrative tasks, such as grading and attendance,” Prince says. “That allows more time for creativity and personal connection in the classroom.”
Investing in AI Education
Artificial intelligence can help teachers and students complete tasks more efficiently and in a way that’s more tailored to individual learning needs. It has the potential to reshape education while also generating profits for investors. That said, the use of artificial intelligence for educational purposes is still in its early stages.
As more schools, students and teachers use artificial intelligence to supplement the learning process, companies in the industry will benefit. Investors can get exposure to the industry with these AI education stocks, which have had strong year-to-date returns as well as third-quarter revenue growth year over year:
| AI education stock | YTD return as of Dec. 4 |
YoY Revenue growth in Q3 |
| Coursera Inc. (COUR) | 73% | 21.4% |
| Zoom Video Communications Inc. (ZM) | 0.6% | 3.2% |
| Alphabet Inc. (GOOG, GOOGL) | 46.5% | 11% |
| Docebo Inc. (DCBO) | 35% | 25.8% |
| Afya Ltd. (AFYA) | 31.2% | 24.6%* |
*Adjusted net revenue growth excluding acquisitions was 13.6%.
Coursera Inc. (COUR)
Coursera makes it easier for students to learn at their own pace and explore various topics. The online course platform features certification programs that give students access to specialized knowledge. Students can also receive online degrees through Coursera, and the wide selection of choices and access to colleges outside of the U.S. can help students access a more affordable path to a degree.
Coursera receives a small percentage of every tuition payment. The company also has a monthly membership, which gives students access to many of its courses.
In June, the company announced a new lineup of courses and credentials in generative AI, deep learning, cybersecurity, and augmented and virtual reality. It’s also incorporating AI interactive learning into its platform, with a virtual coach powered by generative AI that can answer questions, offer feedback in real time and provide video clips to detail a particular concept.
Coursera stock hasn’t rewarded long-term investors, but it is starting to make a comeback. Although shares are down by 22% over the past two years, they’ve bounced back 73% year to date as of Dec. 4.
Coursera has been posting revenue growth above 20% year over year for the past few quarters, and the learning platform is also narrowing its net losses.
[See: Artificial Intelligence Stocks: The 10 Best AI Companies.]
Zoom Video Communications Inc. (ZM)
Zoom became a necessity during the COVID-19 pandemic because remote education temporarily became a requirement for schools. The company has experienced success as a videoconferencing solution for business owners, but it became a mainstream resource in 2020 when COVID shut down in-person workplaces.
Zoom stock soared all the way up to an all-time high of $568.34 per share on Oct. 19, 2020, according to Macrotrends. Shares have fallen by 88% since their peak, and they’ve been roughly flat year to date as of Dec. 4. Zoom has also experienced a slowdown in revenue growth, which has been in the low single digits over the past few quarters. However, net income growth has surged, and it almost tripled year over year in the third quarter of 2023.
The company recently announced Zoom AI Companion, a resource to help teams collaborate and be more productive by assisting with repetitive tasks. It can help with meeting preparation, presentations and summaries as well, according to a September blog post. Naturally, the potential applications of this AI assistant extend to teachers and students.
Zoom is growing its customer base with strong gains in the enterprise sector. The number of Zoom enterprise customers contributing more than $100,000 to revenue in the trailing 12 months increased by 13.5% year over year in the third quarter.
Improved profit margins have helped the company reach a forward price-to-earnings ratio of 14. This lower P/E could make Zoom more desirable to investors, especially if the company’s revenue growth accelerates.
Alphabet encompasses a lot of ground, but it all started with a search engine, Google, that remains a go-to resource for many people. Alphabet uses artificial intelligence to display relevant search results for students seeking information.
Alphabet also has its own advanced AI tool powered by a research large language model, dubbed Bard. You can enter a prompt and receive a detailed answer in a few seconds. Bard also includes article links in its responses that you can use to find additional information.
Alphabet’s cloud solutions give the company additional exposure to AI in education. Many companies rely on Google for their cloud infrastructure, which helps them operate smoothly online. Alphabet, Amazon and Microsoft Corp. (MSFT) are the top three cloud providers.
Alphabet stock is a staple in many index funds and other mutual funds, and the company has a good track record of performing well for investors. Shares are up by 46.5% year to date as of Dec. 4 and have more than doubled over the past five years.
Alphabet’s revenue and earnings are both on the upswing. The company reported double-digit year-over-year growth for both of these metrics in the third quarter. Alphabet also usually posts profit margins above 20%.
New AI tools will give students and teachers more choices, but they will still rely on established brands like Google while they are exploring new options.
Docebo Inc. (DCBO)
Docebo is a learning and development platform that helps students build skills and excel in their careers. Thousands of corporations, such as Amazon, Samsung Electronics Co. Ltd. (005930.KS) and Bayerische Motoren Werke AG (OTC: BMWYY), also use Docebo to educate their employees. The learning platform uses artificial intelligence to optimize its offerings and keep learners engaged.
Docebo focuses on medium and large enterprises. Giving these enterprises an opportunity to educate their workforce can increase productivity and reduce costs. Meanwhile, more skilled employees make fewer mistakes and develop confidence in their work.
Docebo’s business model has worked well for investors, and shares are up by 35% year to date and have more than tripled since its initial price offering in 2020. However, the stock is down by roughly 50% from its all-time high.
The learning platform is profitable and regularly reports high-double-digit year-over-year revenue growth. Docebo generated 25.8% revenue growth in the third quarter.
The stock trades at a steep forward P/E of 58 now, but that valuation could appear more reasonable within a few years if the company continues to grow.
Afya Ltd. (AFYA)
Afya is a Brazilian medical education platform that deploys artificial intelligence to help medical students learn in every stage of their careers. Students can learn the necessary skills to pursue a career, then revisit Afya for digital products for health care services.
Afya increased its total student base by 19.8% year over year over the nine-month period ended Sept. 30. Tuition fees also experienced double-digit year-over-year growth. The company recently acquired northeastern Brazilian medical schools to expand its market share as the largest private provider of medical education in the country.
Afya trades at a forward P/E of 13, and the company has rewarded investors with a year-to-date gain of 31.2%. However, shares are down more than 30% since the stock’s 2019 highs after its IPO. But revenue and net income growth both came in at above 20% in the most recent quarter, suggesting this education provider is on the move.
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AI in Education: 5 Stocks With Growth Potential originally appeared on usnews.com
