A.I. is the real deal in terms of a technological upgrade like the internet was 30 years ago but don’t FOMO into the bubble that will be created in stocks with dot ai in their nomenclature. Not all companies are created equal.
For the long-term investor to sleep peacefully at night thru the vicissitudes of the market, understanding what you own and abiding the Strike Price matter. Like in the gold rush days, start with the picks and shovels, and work out from there. The application winners are far from determined yet. (But Tesla has an awful lot of driving data and A.I. know-how. Conspicuously absent from the BoA list …)
Here is a good starting point: Apple, Microsoft, Nvidia among 15 companies that stand to benefit from AI
“Investment firm Bank of America introduced a list of companies on Tuesday that it believes will benefit from the rise of artificial intelligence … analysts from the firm noted that tech companies are now engaged in an “AI arms race,” with many developing their own chatbots similar to ChatGPT.
semiconductor companies, particularly GPU and chip equipment makers, are “likely beneficiaries” due to the fact that training and running large language models needs “significant” computing model.
The analysts also explained cloud software analytics should benefit from increased data volumes, while cybersecurity stands to benefit from more sophisticated digital threats.
Areas that could be disrupted include media, specifically, video, music and images, as generative AI is able to create content in these industries, which may lead to increased job automation.”
- Microsoft (MSFT) via its OpenAI integration
- Alphabet (GOOG) (GOOGL) via its DeepMind Sparrow LLM and its recent Bard chatbot
- Meta Platforms (META) via its recent LLaMA large language model announcement and GPU enabled AI research supercluster
- Apple (AAPL) as it benefits from licensing the search engine on iOS
- Baidu (BIDU) from its Ernie chatbot
- Nvidia (NVDA) via its GPUs being used in AI arms race
- ASML (ASML) as it is the “leader” in extreme ultraviolet lithography tools
- Taiwan Semiconductor (TSM) as it is the leader in foundry chip making
- Arista Networks (ANET) via high-throughput data center switches used for intensive AI workloads
- Adobe (ADBE) from its Sensei AI platform
- Shutterstock (SSTK) which has a generative AI partnership with OpenAI
- NICE Systems (NICE) via AI data surveillance
- SAP (SAP) via its enterprise and business software
- Relx (RELX) via AI enabled information-based analytics/decision tools
- Palantir (PLTR) via its AI-enabled platforms used by both commercial enterprises and governments.
Note about the image above: We generated it in Shutterstock and BlueWill using the prompt, A.I. arms race. Shutterstock would like us to pay for this image and BlueWillow is free. We’re still deciding which to go with, but an image generation subscription service is likely in our future.
