Bank of America put forward three reasons for why investors are overly concerned about the high expenses of artificial intelligence. The bank stated that investors can expect new catalysts, such as Nvidia's upcoming Blackwell artificial intelligence chip. The bank also said that high-tech expenses are not abnormal, and added that there are several bullish factors in the future. "In our opinion, it is pointless for large cloud computing services providers to acknowledge that the ROI of artificial intelligence is low, at least before 2016," the bank analysts wrote. In fact, for most investors, enthusiasm for AI technology has been the core driving force behind the rise of the US stock market this year, especially in the technology sector. Large technology companies such as Amazon, Meta, Microsoft, and Apple have benefited from the market's belief that AI will revolutionize productivity and have invested a lot of resources in this emerging technology. Goldman Sachs previously calculated that the four companies' capital expenditure and research and development expenditure in the past four quarters totaled $357 billion, and artificial intelligence was an important driver of this huge investment.
Recently, Wall Street has been worried that companies have gone overboard with their enthusiasm for ai, with a lot of spending being put into a technology that may not meet expectations, ultimately resulting in wasted money.
According to Bank of America, the market sentiment has become too bearish too quickly. In a report released on Monday, the bank outlined that high-tech expenses are not abnormal and added that there are still several bullish factors to come. "In our opinion, it is pointless for large cloud computing services providers to acknowledge that the ROI of artificial intelligence is low, at least before 2016," the bank analysts wrote.
"In our opinion, it is pointless for large cloud computing services providers to acknowledge that the ROI of artificial intelligence is low, at least before 2016," the bank analysts wrote.
In fact, for most investors, enthusiasm for AI technology has been the core driving force behind the rise of the US stock market this year, especially in the technology sector. Large technology companies such as Amazon, Meta, Microsoft, and Apple have benefited from the market's belief that AI will revolutionize productivity and have invested a lot of resources in this emerging technology. Goldman Sachs previously calculated that the four companies' capital expenditure and research and development expenditure in the past four quarters totaled $357 billion, and artificial intelligence was an important driver of this huge investment.
Goldman Sachs previously calculated that the four companies' capital expenditure and research and development expenditure in the past four quarters totaled $357 billion, and artificial intelligence was an important driver of this huge investment.
Bank of America listed the following three bullish factors:
Firstly, the implementation of hardware technology in the past has shown that expenses are often necessary in the early stages, and artificial intelligence should be treated in the same way. The bank added that this is also the case when investing in wireless connectivity networks such as 5G: early deployment of the network lasted for three to four years.
Secondly, the focus of artificial intelligence expenses is not just to create new sources of revenue. Bank of America analysts also pointed out that companies are taking defensive measures when investing in this field.
For example, such expenses help technology companies maintain their dominant position in social or e-commerce, or protect their dominance in the field of web search.
Finally, not all artificial intelligence catalysts are in the past, and new catalysts are still on the way. Bank of America pointed out that although companies and countries have not yet clearly begun to adopt artificial intelligence, Nvidia, the "AI total leader," has just announced the highly anticipated Blackwell artificial intelligence chip.
Bank of America analysts wrote, "Concerns about the ROI brought by high artificial intelligence capital expenditures are justified, but in our opinion, such concerns are premature and not conclusive."
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Editor/Lambor