There are many ways to ride the AI wave. For Ann Berry, founder of Threadneedle Strategies, it’s buying a company that collects data in an often-overlooked sector. In an interview with Yahoo Finance Live, Berry said that John Deere, for example, could be a company collecting information about what’s going on in agriculture, but its share price has fallen to some big tech companies. He suggested that it did not get as high a rating.
video transcript
– So what else dominated the market upswing? Of course, it’s the AI hype. Even in earnings calls, this dominates the market frenzy for much of 2023. Everyone seems to want to benefit from the growing interest in AI, but which companies will actually win in the next few years?Threadneedle founder Ann Berry has joined.
And Anne, you gave us a little test. I played around with it a bit in a previous discussion. It has something to do with data.
Anne Berry: Yes, data. data. I will say it differently.
– know.
– I say – you never know what the right way to say it is.
– yes. But it has something to do with it, so how does that theory play out?
Anne Berry: Well, let’s start with the device we all know and love: the iPhone. And we all have it. It’s here and the story around Apple is that there are so many Apple devices out there collecting consumer data 24/7 that they are becoming an AI company. Will data aggregators win out in the consumer space?
So, Julie, I looked at it and said, I think it’s an interesting paper. Now, who are the other equipment manufacturers and data collectors in other areas that we don’t talk about much? In medical equipment, I think it’s Metronics.
So I’m trying to apply Apple’s theories and AI to other industries to find a place where they can thrive without huge valuations.
– Now, speaking of Apple, I mean, look, it’s huge. It’s not the most numerous compared to the rest of this year’s Magnificent, seven, if you will. Year-to-date, it’s up 47%. Is this level too high, or is it because it could be considered a leader in AI? Is there room for more?
Anne Berry: I’m not going to buy another Apple at this point. I’ve bought Apple before. I think there will be an alternate cycle coming as a lot of people are planning to upgrade. And I think there is some kind of AI sitting there.
I think what makes me a little uneasy about Apple is that they’re in the face of regulators trying to figure out how their privacy and data are being protected. Until that is resolved, especially with Apple, I think there will probably be a little over-scrutiny. I think some people are flying under the radar screen.
– AI discussions are very interesting to me. Because all these companies are already doing this. So Deere already has a lot of data. Metronics already has a lot of data. And they’ve tapped into it through machine learning and AI, which has been around for some time.
I’m really curious — and I know we’re not the data scientists sitting at this table — but how is generative AI taking these companies to the next phase of their growth? Are you going to push it up?
Anne Berry: Well, Julie, I think I’m pointing out that there’s going to be a cycle of replacements coming. There will be next-generation hardware and equipment that can process data faster and collect more sophisticated data. For example, sensors are becoming more sophisticated.
Therefore, I believe that there will be an entire generation upgrade of the equipment offered, a replacement of the installed base. But I think another interesting part of this, Julie, is the onsite data scanning and getting real-time insights.
Consider medical devices, for example. One of the applications of AI that Google has talked about is scans and more sophisticated readings of his x-rays, sometimes beyond what a medical professional can do. But the equipment to actually do it has to be in the same room in the doctor’s office, so I think that’s where the cycle comes from.
– You mentioned privacy concerns earlier with Google and with Apple, and you said Apple was being scrutinized. So Google and Alphabet are under heavy scrutiny, especially in Europe. Is there any reason to be concerned about where it stands in terms of the value of the alphabet?
Anne Berry: I agree, but I think this leads to an even bigger question: how will AI be regulated? right? It is debatable right now. We are looking at negotiations taking place in the UK. In fact, the EU is moving quietly in the US, but reading reports in Europe is not so quiet, passing regulations and laws to limit the EU.
We don’t really know what the regulatory framework for AI looks like in the US yet. And until that happens, it’s very hard to know if it will constrain growth, especially at big tech companies.
– Well, we’ll have to see what happens. Anne, thank you for spending so much time with us this morning.
Anne Berry: This was fun.
– yes. Ann Berry, founder of Threadneedle Strategy. appreciate.
