Source: Caixin.
A high-ranking executive at JPMorgan stated that companies using AI to change their business may become the next beneficiaries. The bank said that investors focusing solely on chip manufacturers or cloud computing providers is not the correct approach; instead, investors should also pay attention to the adopters of new technologies.
Given that investors are still enthusiastic about artificial intelligence (AI), a JPMorgan executive said that companies using AI to transform their business may be the next beneficiaries.
Caroline Pötsch-Hennig, the head of private banking for Deutsche Bank, said investors were only focusing on chip makers or cloud computing providers, which are creating new AI models, but that it was not the right approach. Instead, investors should also focus on the 'adopters' of new technology.
In recent months, as investors' enthusiasm for AI technology has grown, some of the "most obvious" beneficiaries' stock prices have skyrocketed. Among them, the "AI leader", with a market cap of over $3 trillion, briefly surpassed Apple on Wednesday. Server manufacturer, Nvidia, has been the best-performing company in the S&P 500 index this year.$NVIDIA (NVDA.US)$And it is clear that in the era of AI, the "enablers" are companies focused on building software models (including OpenAI and other companies), designers and manufacturers of data center hardware (such as Nvidia, Super Micro Computer, and others), as well as cloud computing giants such as Microsoft and Amazon, who operate the infrastructure. The success of these "enablers" is evident to all.$Super Micro Computer (SMCI.US)$Server manufacturer, Nvidia, has been the best-performing company in the S&P 500 index this year.
However, more and more investors are looking for other ways to bet on the potential of AI. For example, JPMorgan has said that some trading clients are flocking to commodity markets, and it is expected that infrastructure needs for this technology will boost demand for energy and equipment.
This is like the appearance of the early steam engine, where inventors and manufacturers were not the only beneficiaries of the technology. Factories, railroads, and ship operators fueled their own businesses and machines based on steam power. Later, the same occurred with electricity, telephones, computers, and the internet. Ultimately, the returns on every innovation flowed from the creators, the commercial pushers, to the technology users.
In the era of AI, it is evident that the "enablers" are companies focused on software model building (including OpenAI), designers and manufacturers of data center software (such as Nvidia and Supermicro Computer), and cloud computing giants (such as Microsoft and Amazon) who operate the infrastructure. The success of these "enablers" is evident to all.$Alphabet-A (GOOGL.US)$In the AI era, the "enablers" are companies focused on building software models (including OpenAI), designers and manufacturers of data center hardware (such as Nvidia and Super Micro Computer), as well as cloud computing giants such as Microsoft and Amazon, who operate the infrastructure.$Advanced Micro Devices (AMD.US)$In the AI era, the "enablers" are companies focused on building software models (including OpenAI), designers and manufacturers of data center hardware (such as Nvidia and Super Micro Computer), as well as cloud computing giants such as Microsoft and Amazon, who operate the infrastructure.$Taiwan Semiconductor (TSM.US)$In the AI era, the "enablers" are companies focused on building software models (including OpenAI), designers and manufacturers of data center hardware (such as Nvidia and Super Micro Computer), as well as cloud computing giants such as Microsoft and Amazon, who operate the infrastructure.$Amazon (AMZN.US)$, $Oracle (ORCL.US)$, $Microsoft (MSFT.US)$Cloud computing giants, such as Microsoft and Amazon, who operate the infrastructure, are among the "enablers" in the AI era.
The fate of the 'pushers' is closely linked to that of the 'users', who are the former's customers. Therefore, Wall Street expects that the benefits of AI will eventually reach the 'users'. At the end of last year, a survey of chief investment officers conducted by Morgan Stanley found that most expect to launch their first artificial intelligence project in the second half of 2024.
"You need to focus on companies that have healthy balance sheets and cash to provide funding for technology innovation," said Mirjam Staub-Bisang, head of BlackRock's business in Switzerland. "If you invest in such companies today, you can reap the rewards in the coming years."
Edward Stanley, head of thematic research at Deutsche Bank, said that a company's share price will not change overnight, but users who can demonstrate progress in their AI plans will increasingly receive recognition from investors at higher price-to-earnings multiples.
"Artificial intelligence is benefiting companies at different speeds," said Patrick Kelly, portfolio manager of growth investment firm Alger. "Some companies have already benefited greatly, while others will achieve growth in the next few years."
Editor/tolk