Antonio De Negri (Smart Bank): “AI is good for US GDP”
On average, it is estimated that AI will lead to a 26% increase in US GDP by 2030, an impact of approximately $16 trillion. If this happens, the impact will be much greater than the spread of computers. Antonio De Negri, CEO of Smart Bank, explains to Truth and deeds How to invest in US companies that will benefit from the advent of artificial intelligence.
How is the US economy doing and what is the state of Stars and Stripes companies?
US companies that have recently released quarterly results account for more than 86% of the total US market capitalization. Therefore, the picture is clear, as the results were solid and exceeded expectations, whether in absolute or relative terms. Take the index sum as a reference
The S&P500, for example, has recorded an earnings contraction of just 3% over the year, compared to the -7% that analysts had expected. Margins, although contracting for the third consecutive quarter, also turned out to be above expectations, especially in the technology and telecom sectors. It is precisely these sectors that include companies with the largest capital, which therefore have a greater weight in the indices and thus contribute significantly to supporting the general market.
What’s next for offshore companies?
The common notion among experts is that the cycle of downward revision of results is now coming to an end, given the number and quality of positive surprises in the first quarter of the year. Many analysts are already revising their earnings projections for 2024 upwards, while the outlook for 2023 remains conservative, with the majority not expecting any earnings growth. Uncertainty related to monetary policies and interest rates now seems to be a thing of the past, as the bond market has been moving at price levels that implied rate cuts this year. However, for some, the other big specter, a recession, is very much alive and kicking even with results and sales that beat expectations.
How do we look at US stocks under these circumstances?
From a portfolio allocation standpoint, the strategists don’t seem particularly concerned about a potential recession, believing it is already reflected in current stock prices. At the same time, they draw attention to other points, which can limit stock gains. In particular, ratings are running
Pre-pandemic levels, especially risk-free interest rates — sovereign bond yields — have risen sharply. This not only makes buying stocks with existing risk premiums less attractive, but also leads to large flows of stocks into stocks in the money markets, which in fact
They raised record investments. In general, the consensus among analysts and strategists is that the US stock market is, and will remain, in a generally valid price range. There are no foreseeable extraordinary risks on the horizon, but it is likely that some pitfalls will limit the increases.
Will the tech sector continue to be an opportunity? There is a lot of talk about artificial intelligence.
Certainly, especially the increasing widespread adoption of artificial intelligence, represents something very interesting whose macroeconomic consequences will be impressive. Analyst projections vary widely based on assumptions about the speed and breadth of adoption, but on average, it is estimated that
Artificial intelligence will lead to a 26% increase in GDP by 2030, with an impact of nearly $16 trillion. If this happens, the impact will be much greater than the spread of computers. Not only that, the impact on future consumption habits is expected to be around $9 trillion.
An area only for IT giants or will they be able to open up to new realities?
Despite confirming facts such as Google and OpenAI, both supported by Microsoft, are rapidly establishing themselves as players of reference for Generative AI, the formation of an oligopoly cannot be taken for granted by analysts. On the contrary, due to the ability to easily train new intelligence
Artificially, many small truths are expected to emerge, each along the lines of a particular need, such as planning a trip, getting legal advice, or investing in the stock market. Moreover, this area can be approached differently and not wondering which horse will win, but trying to invest in a racetrack. Companies providing computing and cloud services, albeit behind the scenes, will benefit from the AI revolution by providing the underlying technologies upon which infrastructure can be built.
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