The Rise of Artificial Intelligence: Tech Stocks Poised for Continued Growth in 2024
Artificial intelligence (AI) has taken center stage in 2023, with platforms like ChatGPT garnering 100 million users in just two months. The market’s excitement about the potential of generative AI has propelled the tech-heavy Nasdaq Composite to a roughly 30% gain this year. The question arises: has the stock market risen too far, too fast?
According to one Wall Street veteran, there is still much more to come. The next wave of AI adoption is set to lead tech stocks to “rip higher” in 2024. Despite concerns about short-term interest rates and the potential withdrawal of investors from the stock market, this analyst believes that the focus should be on the advancements AI will bring in the coming year.
Leading the charge in AI adoption is Nvidia, the company supplying the chips and software that power AI. In its most recent quarter, Nvidia reported record revenue of $13.5 billion, a 101% increase year over year. Microsoft is also poised to benefit from AI adoption, integrating generative AI tools into its popular products and charging a monthly fee for its Microsoft 365 AI Copilot. Analysts anticipate this move could add $100 billion in incremental revenue for Microsoft by 2027.
While Nvidia and Microsoft represent the first wave of AI adoption, there is still a vast opportunity ahead. Analysts predict that cloud infrastructure providers like Amazon Web Services and Google Cloud will be key beneficiaries, as they acquire the necessary computational power and develop AI capabilities to offer services to their customers.
Meta Platforms, the parent company of Facebook, has already developed foundational language models necessary to support generative AI. By integrating AI into its existing operations, Meta is set to benefit from increased revenue from its digital advertising business.
Investors are encouraged to take a long-term view of AI’s impact. The transformative growth driven by AI is expected to hit the tech industry in the next 12-18 months, opening doors for companies to profit from this groundbreaking technology. With continued advancements in AI, tech stocks are well-positioned to ride the wave of AI for years to come.
– Artificial intelligence (AI): Refers to the development of computer systems capable of performing tasks that would typically require human intelligence.
– Generative AI: Refers to AI systems that can generate new content, such as images, text, or music, based on patterns and examples.
– Tech stocks: Stocks of companies operating in the technology sector, involved in the development and production of technology-related products and services.
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