AI to Influence Stock Markets More
The influence of artificial intelligence (AI) on stock markets is expected to surpass that of inflation, according to market strategist Michael Antonelli. In an interview with Yahoo Finance, Antonelli explains that currently, AI is a major factor driving stock prices and market sentiments for many companies. Inflation data, such as the Consumer Price Index (CPI) and Producer Price Index (PPI), do not have as significant an impact on stocks as AI trajectory.
AI Stocks See YTD Surge
Companies with exposure to AI have experienced a surge in their stock prices this year. For example, Nvidia’s year-to-date growth stands at an impressive 41%, while IBM has seen a rise of 14% so far. This overall increase in AI-related tech stocks has also contributed to the Nasdaq’s 5.3% growth this year.
Research suggests that most publicly listed companies currently have some level of AI integration. However, generative AI is not yet a significant revenue contributor for companies like Google, Meta, and Baidu. It is predicted that by 2024, generative AI will start generating revenue for these tech giants, which will be closely watched by the markets.
AI to Influence Growth in the Future
Investors have been focusing on the revenue models of companies involved in AI. Currently, Meta, Amazon, Apple, Alphabet, Microsoft, Tesla, and Nvidia account for 17.2% of the MSCI All Country World Index. However, the impact of AI is expected to extend beyond individual companies and stocks.
The global artificial intelligence industry is projected to grow at a compound annual growth rate (CAGR) of 37.3% between 2023 and 2030. Countries worldwide are implementing policies to promote the import and export of AI technologies. Forbes predicts that China will benefit the most from AI, with a 26% increase in GDP by 2030, while North America’s GDP is expected to grow by 14.5% in the same period.
Hot Take: AI’s Dominance
As AI continues to evolve and reshape various industries, its influence on stock markets is becoming increasingly significant. The current hype surrounding AI has propelled tech stocks and shifted market sentiments. Inflation data, which traditionally had a strong impact on stocks, is now taking a backseat to the trajectory of AI development.
Investors and market participants should closely monitor companies’ AI integration and revenue models as they are likely to play a crucial role in future market growth. Additionally, the global AI industry’s projected growth highlights its potential to transform economies and drive financial markets in the coming years.
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