Shelby McFadyen, investment analyst at Motley Fool Asset Management, spoke to Quartz on the latest edition of their “Smart Investing” video series.
Watch the interview above and read the transcript below: The transcript of this conversation has been lightly edited for length and clarity.
Andy Mills (AM): Big tech companies like Apple, Nvidia, and Microsoft have seen massive growth over the past few years thanks to AI. Do you think the craze for AI will continue in the second half of the year?
Shelby McFadyen (SM): I think that unless there's a big outside influence, the current levels can and will likely remain. So whether it's a macro situation that hits Nvidia hard or something that really devastates Apple's sales, that kind of thing could happen. I wouldn't be surprised if it would remain unless something really changes the outlook. I don't know if we're going to see anything increase significantly in another six months unless there's real innovation. Because from my perspective, the truth is we're in a holding period where we're still waiting for some companies to show us what they're doing with these new features. So unless they haven't announced anything yet and have been working on it for a while, I'm not sure that just the second half of the year is going to guarantee any big announcements that would further justify these valuation increases. So I think that's pretty much where we are this year, but we don't know how it will turn out. They might surprise us.
AM: Yeah, that's a good point. I feel like everyone thinks, “AI is cool, we're doing it, and you're going to see it.”
SM: By now we're all used to the water temperature, the question is, will it stay lukewarm or will someone make some waves?
AM: Yeah, definitely. For example, Apple's recent AI announcement seemed like the right and logical move for them to integrate AI. But it wasn't a surprise.
SM: Yes. There is also a difference between new products and new features. If you think about Apple's features, they've been at a high level for a long time, so this doesn't surprise anyone because it seems like something they should be able to do. So this is not shocking. There are parts of the process that are unique and, in and of themselves, not easily copied. But there are parts that other companies can copy. The integration of user profiles across different platforms is nothing new. What we've seen with Data Clean Room is a great example of that integration, and why companies have been pursuing it for a long time. Trying to create something like an anonymous identifier for consumers has been pursued for a long time.
