A Deja Vu of the Tech Kind
If you’ve been around the block a few times, you’ve noticed that the chatter of artificial intelligence is as unavoidable as pumpkin spice lattes in the fall. It’s become the talk of the town in the world of capital markets, regulation, and just about every casual conversation that swings towards tech. A certain air of familiarity is creeping in, with some claiming that we’re witnessing a technological event not experienced since the mid-1990s. Yes, you heard it right. That time when the internet went from being a nerdy pastime to a global sensation.
The Lucrative Tango of AI and Tech
According to a recent note from Wedbush Securities analyst Dan Ives, the tech sector is being waltzed into an $800 billion AI extravaganza. The cashing in on AI is taking place earlier than anticipated, with Nvidia’s latest projections and our own intel giving us a boost in our bullish stance on AI that we started the year with.
Don’t think the tech stocks have had their fill. Ives predicts a steady climb, estimating a rise of 10% to 12% this year, particularly with the Federal Reserve pumping the brakes on its interest rate hikes. The AI invasion into, well, everything, is making it look like the second coming of the Industrial Revolution.
The Year That’s Been for Tech Stocks
2023 has been a good year for tech stocks. A year that’s expected to keep on giving as the risk-on trade gathers pace, and investors are all eyes and ears for the AI Revolution and the positive waves it’s sending through software, consumer digital advertising, and the chip sector.
Big Winners of the AI Boom
Nvidia and Microsoft seem to have hit the jackpot in the AI rush on Wall Street, with their shares performing an impressive dance number of nearly 200% and 40% year-to-date, respectively. Nvidia’s triumph lies in the continued adoption of its accelerator GPUs for use in large language model training, while Microsoft has made the most of its partnership with OpenAI by weaving ChatGPT into almost every single product.
But they’re not alone in the party. Apple, with its Vision Pro spatial computing headset that’s all about AI, and other tech giants like Amazon, Oracle, Google, and Meta Platforms are also expected to reap the AI windfall.
The AI Race: Everyone Gets a Piece
Even smaller tech firms are poised to get a taste of the “AI arms race” success, with MongoDB, Snowflake, C3.ai, Palantir Technologies, and Salesforce poised to capitalize. But let’s not fool ourselves. It’s not going to be all sunshine and rainbows. There will be hiccups for many of these firms, and the long-term effects of AI on humanity are still a bit of a mystery, though optimists believe the benefits will outweigh the costs.
The AI Future: A Long Runway Awaits
Despite these uncertainties, Ives is positive about a “long runway of growth ahead” for AI, a growth potential we haven’t seen in nearly 30 years. These companies, across diverse sectors, are performing admirably as they continue to discover new applications for this technology.
In essence, while tech valuations will remain the talk of the town, AI is driving the tech sector towards a momentous occasion that has been lying dormant since the 1990s.
