Soros Fund Management Chief Investment Officer Dawn Fitzpatrick speaks at Bloomberg Investments event. Gina Moon — Bloomberg/Getty Images
The AI buzz has been so hot so far that equity investors have since rewarded companies that made headlines for integrating generative AI, such as Microsoft and Meta, up 35% and 111% respectively year-to-date. . AI-enhancing chip makers have also been boosted by the excitement, most notably his Nvidia, which is up 162% so far this year.
But is the hype going too far and pushing these stocks higher than they should be? Duquesne Family Office billionaire investor Stanley Druckenmiller said he plans to own Nvidia at Bloomberg’s investment conference in New York City on June 7. “If my thinking about AI is correct, I could own Nvidia for another couple of years,” he said.
Dawn Fitzpatrick, CEO and chief investment officer of Soros Fund Management, explained at the Bloomberg conference that much of the AI hype is already priced into the stock. “The real beneficiaries are applications — the cloud and high-performance chip companies. These stocks are currently estimating pretty huge compound growth, but they don’t necessarily need to pursue it,” she said. Still, she said the technology will drive dramatic growth in all areas. “That functionality will grow exponentially,” she added.
Other investors are wary of the enthusiasm for some of AI’s most anticipated applications, such as helping with stock selection. David Siegel, co-founder of quantitative hedge fund firm Two Sigma Investments, said he sees current generative AI as a logical extension of advances in computing technology. “I’ve never seen anything quite like this [the hype], Chat GPT really captured people’s imaginations in a way that completely surprised everyone,” Siegel said at the conference. “I see this as progress and it’s very exciting, but I’m not really buying into all the hype.”
Sixth Street vice chairman and partner Marty Chavez echoed a similar view, saying at the conference, “It’s just software.” “I don’t think AI will achieve what some call the Holy Grail. [500] I can’t say, ‘It will be in six months,’ and I can’t tell the AI,” he explained.
Overall, investors stressed that AI could bring significant growth and profits if used well, but it was too early to know which companies would survive and how many would fight for market share. However, many expressed optimism about the technology, despite the outcry calling for due consideration of the risks of building it. “I’m very excited. I think this is the biggest revolution, bigger than the Internet revolution,” said Ray Dalio, a prominent investor who founded Bridgewater Associates.
