Artificial intelligence has taken the investment world by storm since the beginning of the year. This is largely thanks to the emergence of ChatGPT, which sparked a buying wave in AI stocks. But it has its critics, with some analysts warning of the risks of investing in AI. Should you jump on the trend or remain skeptical? On Wednesday, bulls and bears went head to head on CNBC’s “Street Signs Asia.” Albion Financial Group Chief Investment Officer Jason Ware says that in the long run, “profitable” AI “will live on.” “It may have suddenly gotten a lot of attention recently, largely because of ChatGPT, but in reality it has been with us for many years in the background, mainly through what is known as narrow AI,” he said. He used Google Maps and Siri as examples. and other digital assistants. He said that support for AI will continue to grow and that it will “make money” in the long run. Ware added that advances in AI, especially machine learning, deep learning, and natural learning, will accelerate. Citing names of tech giants such as Alphabet, Microsoft, Apple and Oracle, he said, “I mean, there are some big-cap, high-quality good companies today that will be better tomorrow with AI innovation. would,’ he said. “Not every company in the AI space will be a winner, but there are quality companies in the space to own.” “Excessive” Valuations Senior Investment Strategist, Peapack Private Wealth Management David Dietze says investors need to be “very cautious.” Valuations are “excessive,” he said. “More than half of the market gains this year came from AI-hyped stocks,” he said. . An example of this is Meta, which has soared above 100% this year, Dietze said, partly as a result of the shift from the Metaverse to AI. “Many companies [few] “There are real AI plans, but they’re just touting their exposure to AI to boost their stock price and name recognition,” Dietze said, adding, “Every company is on board, and competition is driving the price of AI-related services.” ,” Dietze said. Dietze said AI has privacy and regulatory issues to deal with, citing the example of voice duplication: “So if government regulation is imposed on top of competition, any excess profits can be squeezed out. ‘ added. “Change is inevitable. You either evolve with it or die with it. A company with a high quality, and … that’s what we’re aiming for, with a quality core company,” he said. Ware said regulation is nothing new in any way, noting that big tech companies have been under the thumb of regulation for “a long time,” adding, “We contribute to the economy of these companies. They want to invest in the space, and I think so too.” “I’m betting on AI, but not on government regulation that will net revenue in the long run,” he said. While we’re talking about investing in AI, here’s some advice for those who are still enthusiastic: “In terms of the gold rush, [it was] People often made money by investing in companies that provided pickaxes and shovels. [versus the actual gold miners]. We should partner with companies that provide tools for the growing tech sector,” he said, saying that for such large tech companies, AI is only a fraction of the total revenue and profits, so it’s safer. , said profits would be more constrained. Ware added: “Forget betting on ‘pure’ AI companies with no revenue and no moat. [higher] capital cost. “This is a speculation, not an investment,” Ware said. “The idea here is to own a good business today with the promise of an even better business tomorrow.” Companies such as Visa, UnitedHealth and Honeywell will use AI in non-direct ways to improve their businesses, he said.
