The Investing News Network (INN) spoke with analysts, market watchers and insiders to get their top predictions. Find out about the top trends and companies you need to watch, which industries are benefiting most from AI and whether the market is overvalued.
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Competition in the artificial intelligence (AI) sector escalated dramatically in 2024, with major tech companies investing billions in a race to research and develop advanced AI technologies.
This surge in investment spurred rapid advancements, fierce competition and a wave of innovation that has the potential to reshape the technological landscape moving forward.
Here the Investing News Network delves into the trends that defined the AI sector in 2024.
As mentioned, major tech companies jumped headfirst into AI in 2024.
Apple performance, January 1 to December 17, 2024.
The company’s share price gained almost 8 percent by the end of the conference.
Vertical integration gained momentum in 2024 as companies invested in more parts of the chip-making process.
NVIDIA performance, January 1 to December 17, 2024.
The shifting trends resulted in TSMC emerging as an undisputed victor. The company reported outstanding revenue and profits in 2024, fueled by a surge in demand for powerful chips and its advanced manufacturing technologies.
TSMC performance, January 1 to December 17, 2024.
The rise was driven by strong demand for its semiconductor products and the successful integration of VMware. The company’s AI-related revenue more than tripled, and its quarterly dividend rose by 11 percent.
Broadcom, Qualcomm and Intel performance, January 1 to December 17, 2024.
It’s worth noting that the initial surge in spending and subsequent pullback could have been influenced by a variety of factors, including hype cycles, macroeconomic conditions and evolving understandings of AI’s capabilities and limitations.
Ultimately, despite occasional fluctuations and concerns, investor confidence in the tech sector remained strong throughout 2024, with funding continuing to flow. As of mid-December, shares of Microsoft were up over 21 percent year-to-date, while Alphabet was up by over 44 percent and NVIDIA was up an astonishing 166 percent.
In 2024, the AI sector experienced rapid advancements and fierce competition, driven by substantial investments from tech giants. As the technology continues to mature, the stage is set for continued innovation and disruption, promising an exciting future for AI and its applications.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
The increasing prevalence of artificial intelligence (AI) across a wide array of industries has spurred significant investment in the sector over the last two years as the world’s largest tech firms jump in. As AI continues to evolve, many investors are wondering if 2025 will be a pivotal year when these investments begin to show significant returns.
From its impact on stock market valuations to its transformative potential across industries, here the Investing News Network delves into the key trends and developments that are shaping the future of AI.
Essentially, the US stock market is priced for perfection, leaving it susceptible to a correction triggered by rising interest rates, disappointing earnings or a broader economic slowdown.
Further, the expectation of continued profit margin expansion and earnings growth fueled by ongoing AI innovation supports the notion of further upside potential for tech stocks.
Rather than focusing on reasons for its overvaluation and bearish indicators, he aims to understand the underlying factors driving the market’s behavior over the past two years.
“The market is telling us that we are in a ‘Model Shift’ when it comes to future growth and profits,” he explained. “Traditional valuation methods, like price-to-earnings ratios, are backward-looking and may not be suitable in this environment. Investors are focused on long-term potential, particularly in areas like AI, and are willing to pay a premium for it. The current surge in AI might resemble the dot-com bubble, but it could take years to confirm.”
He added that interest rate cuts from the US Federal Reserve would support higher valuations.
BNY also points to historical data showing that an environment of easing monetary policy tends to coincide with economic growth, with an average of 16.5 percent growth in the year following initial rate cuts since 1984. It suggests that S&P 500 earnings growth will be between 10 to 15 percent in 2025, with the index reaching around 6,600 in 2025. Although this represents slower growth compared to 2024, it still indicates continued expansion.
While Rosenberg is mindful of near-term risks, such as weakness in the US labor market and the likelihood of profit-taking and early rebalancing, he emphasized the importance of keeping an open mind in 2025.
In his view, it’s key for investors to learn from the mistakes of the past year, such as overreacting to short-term volatility and underestimating the potential of transformative technologies.
While Big Tech pours billions into AI development, the question of profitability in 2025 hangs in the balance.
Regardless of the exact timeline or nature of AGI’s arrival, one thing is certain: the race to develop and deploy advanced AI is driving an insatiable demand for powerful hardware, and key companies are stepping up.
For its part, Goldman Sachs predicts that investor focus will now shift from AI infrastructure to a wider “Phase 3” of AI application deployment and monetization. Companies of interest include software and services firms.
Companies like NVIDIA, Meta and Microsoft are pursuing a monopoly strategy, aiming to capture a large market share and maximize value extraction from a broad user base. Challenges include competition and pressure to keep prices low.
The outlook for the tech sector and the broader stock market in 2025 is cautiously optimistic.
AI is expected to continue playing a pivotal role, with the race for AI dominance fueling investments in infrastructure and innovation, and positioning key hardware and software players for potential gains.
However, the profitability of AI investments remains to be seen. Companies’ ability to adapt and capitalize on emerging opportunities will be crucial for sustained success in the dynamic landscape of 2025.
Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Syntheia and Zero Candida Technologies are clients of the Investing News Network. This article is not paid-for content.
Artificial intelligence (AI) is still emerging, but there are plenty of billion-dollar companies in this space.
As the market has grown over the past few years, AI technology has made strong inroads into several key industries, including logistics, manufacturing, finance, healthcare, customer service and cybersecurity.
Below are three of the top US AI stocks organized by market cap.
Market cap: US$3.19 trillion
Share price: US$428.91
Market cap: US$2.95 trillion
Share price: US$120.05
The global leader in graphics processing unit (GPU) technology, NVIDIA is designing specialized chips used to train AI and machine-learning models for laptops, workstations, mobile devices, notebooks and PCs.
The company is partnering with a number of big-name tech firms to bring various key AI products to market.
Market cap: US$2.03 trillion
Share price: US$164.29
The company has created the AI chatbot Gemini, formerly known as Bard, which is integrated into products such as its Google Suite, the Chromecast browser and the Google Pixel phone line.
Below are three of the top Canadian AI stocks by market cap.
Market cap: C$34.93 billion
Share price: C$154.55
Montreal-based CGI is among the world’s largest IT systems integration companies, and offers a wide range of services, from cloud migration and digital transformation to data analysis, fraud detection and even supply chain optimization. Its more than 700 clients span the retail, wholesale, consumer packaged goods and consumer services sectors worldwide.
Through a partnership with Google, CGI is leveraging the Google Cloud Platform to strengthen the capabilities of its CGI PulseAI solution, which can be integrated with existing applications and workflows.
Market cap: C$12.15 billion
Share price: C$44.78
Ontario-based OpenText is one of Canada’s largest software companies. The tech firm develops and sells enterprise information management software. Its portfolio includes hundreds of products in the areas of enterprise content management, digital process automation and security, plus AI and analytics tools.
OpenText serves small businesses, large enterprises and governments alike. Its AI & Analytics platform has an open architecture that enables integration with other AI services, including Google Cloud and Azure. It can leverage all types of data, including structured or unstructured data, big data and the internet of things to quickly create interactive visuals.
“Leveraging AI for impactful results depends on reliable data — without it, even the most skilled data scientists will struggle,” OpenText CEO and Chief Technology Officer Mark J. Barrenechea stated.
“By expanding the Aviator portfolio in conjunction with our world class information management platform, Cloud Editions 24.1 empowers customers with the tools and insights needed to get ahead.”
Market cap: C$12.08 billion
Share price: C$138.10
Descartes Systems Group provides on-demand software-as-a-service (SaaS) solutions.
“AI and ML are perfect extensions to our advanced route optimization and execution capabilities,” Ken Wood, executive vice president at Descartes, said. “From dynamic delivery appointment scheduling through planning and real-time route execution, we’ve used AI and ML to improve our ability to deliver the next level of fleet performance for customers.”
The biggest spenders when it comes to AI in Australia are the banking industry, the federal government, professional services and retail. Below are three of the top Australian AI stocks by market cap.
Market cap: AU$22.52 billion
Share price: AU$148.72
Xero provides cloud-based accounting software for small- and medium-sized businesses. The company’s product portfolio also includes the Xero Accounting app, Xero HQ, Xero Ledger, Xero Workpapers and Xero tax tools.
Market cap: AU$7.84 billion
Share price: AU$23.80
TechnologyOne is another large enterprise technology software firm in Australia. In fact, it is the country’s largest enterprise resource planning SaaS company. TechnologyOne has a client base of over 1,200, including customers in the government, education, health and financial services sectors across Australia, New Zealand and the UK. The company’s research and development center is targeting cloud-based technology, AI and machine learning.
Market cap: AU$351.38 million
Share price: AU$1.86
Weebit Nano develops silicon oxide-based resistive random-access memory (ReRAM) technologies. The company seeks to address the need for significantly higher-performance and lower-power computer memory technology.
The Israeli semiconductor IP company’s products can be used to enable edge AI applications and AI systems such as neuromorphic computing. An advancement in AI and machine learning, neuromorphic computing is based on architectures designed to function in the same way as the human brain’s operation.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
While it may seem like AI has exploded onto the scene in recent years, the phrase “artificial intelligence” has been around since 1955, when it was used to describe a new computer science subdiscipline.
Today we use AI to describe simulated intelligence in machines. In other words, machines with AI are capable of simulating thinking like people and mimicking their actions. The ideal characteristic of AI is the ability to rationalize.
For investors who would prefer to gain exposure to AI through the overall market rather than specific AI stocks, exchange-traded funds (ETFs) are a popular avenue. Here the Investing News Network looks at five AI ETFs to invest in, based on the largest listed on ETFdb.com. All details were current as of June 10, 2024.
According to ETFdb.com, these AI ETFs are required to meet one of three criteria:
AUM: US$2.77 billion
AUM: US$1.91 billion
AUM: US$672 million
The fund has the lowest expense ratio of the five AI funds on this list at 0.47 percent.
AUM: US$532 million
The First Trust NASDAQ Artificial Intelligence and Robotics ETF was launched in February 2018. It follows a modified equal-weighted index of all-cap global companies involved in AI or robotics.
AUM: US$136 million
The last AI ETF on this list is ROBO Global Artificial Intelligence ETF. It is relatively new compared to the others, having launched in May 2020. The fund has an expense ratio of 0.68 percent.
This is an updated version of an article originally published by the Investing News Network in 2017.
Securities Disclosure: I, Melissa Pistilli, hold no direct investment interest in any company mentioned in this article.
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