Artificial Intelligence (AI) is not a rogue robot or malicious software as often portrayed in Hollywood movies.
It’s essentially mathematics and software working together to give computers the ability to learn, reason, and create, much like humans.
The stock prices of companies that are well-positioned to profit from the AI revolution have soared in recent months.
One of them is Nvidia’s share price, which is up more than 230% year to date. This made Nvidia one of our best performing stocks this year.
Rosenblatt raised its price target on Nvidia to $1,100. If Nvidia’s share price reached $1,100 it would make it the second-largest company in the world.
In a statement, Jensen Huang, Nvidia’s chief executive, said “The accelerated computing and generative AI era has begun.”
Google Cloud is also benefiting from this trend since 70% of generative AI unicorn start-ups use Google Cloud.
The cloud business is a sticky one, due to economies of scale shared between the company and its customers. This creates a virtuous cycle that can generate sustainable returns over a long period of time.
The Truth About Artificial Intelligence
Artificial Intelligence (AI) has the ability to revolutionise human intelligence and progress across a range of fields.
From serving as advanced tutors for children to aiding professionals in their work, AI promises to make us more effective in what we do from self-driving cars to preventing cybersecurity threats and much more.
It can also enhance decision-making in leadership roles, fuel economic growth by accelerating productivity, and even revolutionise science and the arts.
For example, PWC stated artificial intelligence has the potential to make a global contribution of $15.7 trillion by 2030.
AI is expected to optimise energy usage, model climate patterns, and help in conservation efforts.
In warehouses, humanoid robots have begun working with people capable of four hours on one charge for moving boxes and equipment.
Furthermore, AI has applications in making more strategic and safer decisions in military conflicts.
Overall, AI is portrayed as a transformative force for good across multiple aspects of human life.
Despite these positive attributes, AI is currently a subject of moral panic, with fears about job loss, societal disruption, and inequality.
Like any technology, it’s not rosy. There are of course ethical considerations we must face such as copyright concerns and the potential for both good and harmful uses.
Unfounded fear of mass unemployment due to automation, with the belief that “this time is different.”
However, past technological advancements have resulted in more jobs and higher wages, not the opposite.
Technology usually becomes more affordable and widespread over time, benefitting many rather than concentrating wealth.
Remember when only the rich could afford a personal computer? Now, most people have access to personal computers.
In conclusion, we think AI is not a threat but provides a significant opportunity for human advancement. It has the potential to create an economic boom, increased job opportunities, and higher wages, rather than unemployment. It’s a promising path towards a better future. Ready to be part of something bigger? Invest with us and let’s shape the future together.
Awet Ghirmay, Head of Investment Research
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Risk warnings
The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change. This blog is based on my own observations and opinions.
