Artificial intelligence (AI) is poised to revolutionize various industries, and according to Goldman Sachs, the next steps in this booming sector are taking shape. While high valuations of certain stocks have made some investors nervous, there are still opportunities for growth and potential bargains in the market. Ryan Hammond, a member of Goldman’s portfolio strategy research team, recently outlined the upcoming stages of the AI trade in a note to clients.
Phase 1: The Big Winners
Nvidia has been one of the major beneficiaries of the AI boom and continues to soar in value. However, Hammond believes that the AI trade should expand beyond the currently dominant players like Nvidia. As the use cases for AI become clearer, new winners are likely to emerge.
Phase 2: Infrastructure Builders
The second phase of the AI trade will focus on companies involved in building and maintaining AI infrastructure. This could include chipmakers, cloud providers, other technology firms, and utilities. These companies will play a crucial role in enabling the widespread adoption and implementation of AI technologies.
Phase 3: Revenue Boosters
In the third phase, companies will start incorporating AI tools to enhance their revenues. This means that businesses across various sectors will harness the power of AI to drive growth and improve their bottom lines.
Phase 4: Productivity Gains
The final phase of the AI trade will witness companies experiencing significant productivity gains from AI implementation. This boost in efficiency and effectiveness is expected to result in improved financial performance.
Undervalued Stocks and Market Anticipation
Goldman Sachs has identified stocks that align with each phase of the AI trade. While some of these stocks have already shown signs of progress, others may present attractive opportunities due to their current valuations. For instance, global chip manufacturer GlobalFoundries, although experiencing a recent decline in stock price, could offer value for investors looking for entry points.
FAQ
- What are the phases of the AI trade?
- Which companies are involved in AI infrastructure building?
- How can investors take advantage of the AI revolution?
- Which undervalued stocks are worth considering?
The AI trade is expected to progress through four phases: 1) The emergence of big winners, 2) The development of AI infrastructure, 3) The integration of AI tools for revenue growth, and 4) The realization of productivity gains.
Companies involved in building AI infrastructure include chipmakers, cloud providers, technology firms, and utilities.
Investors can consider investing in stocks that align with the different phases of the AI trade. These stocks may offer growth potential and could be undervalued opportunities.
Some undervalued stocks that may present opportunities include GlobalFoundries, Teradyne, Keysight Technologies, Palo Alto Networks, NextEra Energy, Intuit, Adobe, Pinterest, Tenet Healthcare, and Clarivate.
Conclusion
The AI revolution is set to reshape industries, and investors can capitalize on this trend by carefully considering stocks aligned with the various phases of the AI trade. As the AI landscape continues to evolve, new winners will emerge, and companies involved in infrastructure building, revenue growth, and productivity gains will play key roles in driving the AI revolution forward.
Sources:
Artificial intelligence (AI) is a rapidly growing industry with immense potential to revolutionize various sectors. According to Goldman Sachs, the AI trade is entering different phases that offer opportunities for growth and investment. Let’s explore these phases and the market forecasts for the AI industry.
Phase 1 of the AI trade focuses on the big winners like Nvidia, which has experienced significant success due to the AI boom. However, Goldman Sachs suggests that as the use cases for AI become clearer, new winners are likely to emerge, expanding beyond the currently dominant players.
Phase 2 of the AI trade revolves around companies involved in building and maintaining AI infrastructure. This includes chipmakers, cloud providers, technology firms, and utilities. These companies will be crucial in enabling the widespread adoption and implementation of AI technologies.
Phase 3 signifies the integration of AI tools into businesses to enhance revenue growth. As companies across various sectors harness the power of AI, they can drive growth and improve their bottom lines. This phase offers immense potential for companies to leverage AI in their operations and decision-making processes.
The final phase, Phase 4, is where companies witness significant productivity gains from AI implementation. By leveraging AI, companies can enhance efficiency and effectiveness, leading to improved financial performance.
Goldman Sachs has identified stocks that align with each phase of the AI trade. While some stocks have already shown progress, there may be attractive investment opportunities based on their current valuations. For example, GlobalFoundries, a global chip manufacturer, despite experiencing a recent decline in stock price, could offer value for investors seeking entry points.
In terms of market forecasts, the AI industry is expected to grow exponentially in the coming years. Technological advancements, increasing data availability, and the need for automation are driving the demand for AI technologies. This creates a favorable market environment for companies involved in AI infrastructure, AI tools, and AI-enabled solutions.
Investors looking to take advantage of the AI revolution can consider investing in stocks aligned with different phases of the AI trade. These stocks offer growth potential and may be undervalued opportunities for investors. Some undervalued stocks mentioned include GlobalFoundries, Teradyne, Keysight Technologies, Palo Alto Networks, NextEra Energy, Intuit, Adobe, Pinterest, Tenet Healthcare, and Clarivate.
In conclusion, the AI revolution is poised to reshape industries and present significant opportunities for investors. The different phases of the AI trade, including the emergence of winners, infrastructure building, revenue growth, and productivity gains, offer avenues for investment and potential bargains in the market. As the AI landscape continues to evolve, companies involved in AI infrastructure, revenue growth, and productivity gains will play crucial roles in driving the AI revolution forward.
Sources:
– CNBC – link
The source of the article is from the blog dk1250.com