Satya Nadella, CEO of Microsoft. Chonna Kasinger/Bloomberg via Getty Images
Last year was a tough year for tech stocks, to say the least. Stubborn inflation and aggressive rate hikes by the Federal Reserve weighed on high-growth sectors, sending the tech-heavy Nasdaq Composite down more than 30%. But even as those headwinds carry over into 2023, tech stocks have seen a spectacular upturn this year thanks to the boom in artificial intelligence, which Wedbush’s Dan Ives believes is still in its early stages. ing.
“We estimate an $800 billion market opportunity over the next decade as this AI Game of Thrones rolls out across the enterprise and consumer tech sectors,” tech analysts said on Sunday’s Research. Writing in a notebook, I mentioned the entire potential market for AI.
Investors’ optimism about AI has risen since Microsoft-backed OpenAI unveiled ChatGPT in November, a “generative AI” chatbot that can answer questions, write emails, pass MBA exams, and more. Opinions swirled, forcing many tech companies to release: Or at least flaunt the latest technology for fear of being left behind.
Google debuted its chatbot, Bard, in February, and Meta released LLaMA later that month. Generative AI techniques are also used in new image generation software such as OpenAI’s DALL-E 2, Stable Diffusion, and Midjourney to create photorealistic images from text prompts. But AI is more than just chatbots and image generators. Ives argues that this is an internet-level innovation with broad applicability, which means investors shouldn’t sit on the sidelines even in a volatile economic climate.
“Superintelligent AI could disrupt just about any part of the world,” Ives wrote, arguing that the technology is “already substantially smarter than humans.”
He notes that JP Morgan is using AI to predict the behavior of the Federal Reserve, and that AI software firm Palantir saw “unprecedented demand” for its battlefield intelligence platform earlier this month. said.
Ives isn’t the only AI bull.and luckAt last week’s MPW conference, Ark Invest’s Kathy Wood said AI would cause widespread and positive “disruption” across many industries in the coming years, with Tesla being one of the technology’s biggest beneficiaries. argued that it could become Goldman Sachs senior strategist Ben Snyder said last week that he expects AI to boost corporate profits by 30% over the next decade as productivity increases.
For Ives, the current leader in the “AI arms race” is Microsoft. The analyst, who has been analyzing tech stocks since the 90s, believes Satya Nadella’s company could capture search market share from Google by integrating ChatGPT with its search engine Bing.
“For Microsoft, the monetization opportunity for Bing is very real,” he wrote. “Every share that goes from Google search to the new Bing he’s worth is worth billions of dollars in advertising dollars.”
Ives said Microsoft is well positioned to profit from the early stages of AI development thanks to its cloud server business, Azure. As his vice president of Microsoft’s Cloud and AI Group, Scott Guthrie, detailed in his March article, Microsoft is “going to use the cloud in his business to support his AI technology.” We’ve spent years building ‘supercomputing resources’.
Ives believes Microsoft is the “clear market leader in the AI race at the moment,” with Microsoft leading in cloud computing, while tech giants Google, Apple, Meta, Nvidia and Amazon He pointed out that other companies, including , and smaller pure companies, did as well. AIs like C3.AI and SoundHound will be battling it out in this space for the next decade, spending billions of dollars in the process. At the same time, regulators around the world will have many questions that could slow the development of AI, Ives said.
But overall, analysts believe AI will be “the biggest technology theme in decades,” and investors should take advantage of it. “The subject of AI is one of the most transformative themes we’ve covered in tech stocks on the streets for 22 years,” he wrote.
