Recently could News24 report that the Swedish online bank Avanza’s USA fund missed out on investing in stock market comet Nvidia last year, to the chagrin of almost 100,000 Swedish customers.
The company is now going to redo the portfolio, and maybe you will then buy a bunch of Nvidia shares, you might think.
DO NOT MISS: 90,000 Avanza customers swindled huge sums – have you been affected?
The hype stops
But it may be a bit of an afterthought – the stock fell on Friday and the big tech giants in the US dragged the American companies into the red. The hype may have stopped for now.
But Nvidia and the other tech companies are not a daydreamer, says Hanna Andreen who is CEO of Flat Capital – a listed investment company that has its ear to the rail.
– I have strong faith in these companies in the long term. They have a position within the markets they operate in that cannot be challenged by anyone, says Hanna Andreen News24.
90,000 Avanza customers swindled huge sums – have you been affected?
Hanna Andreen, CEO of Flat Capital
Flat Capital has great faith in investments in new technology and AI. Last year, Hanna Andreen participated in Nordnet’s panel discussion “Boom or doom” (sadly translated to economic boom or bust), and last Friday she participated in SVT’s Ekonomibyrån in prime time.
More and more of the world economy is tied to the big tech giants on the American west coast, and when Microsoft hiccups, it’s the entire globe that drinks five glasses of water and holds its breath.
The companies have been accused of monopolies in, among others, SVT’s Ekonomibyrån, where journalist Franklin Foer is quoted with the words “Google, Facebook, Amazon and Apple are the most powerful monopolies in human history”.
Lead – not monopoly
Something that Hanna Andreen doesn’t really buy.
– They are powerful, and they have an advantage. But it’s all about how they position themselves in the AI arms race.
Flat Capital itself took in new capital with an issue from the owners last year, which resulted in SEK 150 million and an oversubscription of 111 percent.
A clink in the coffers that lands well ahead of upcoming investments in the technology industry in 2024, one can imagine.
Digital revolution
The seven largest companies on the American stock exchanges are Apple, Microsoft, Alphabet (Google), Meta (Facebook), Nvidia, Amazon and Tesla. They have all exploded during the technological revolution of the last 30 years when home computers, wireless internet and smart mobile phones became commonplace.
Now we are facing an AI revolution which, by all accounts, looks set to change the way we look at technological solutions. And everyone wants to join the bandwagon.
“The Magnificent Seven”
The tech giants have been called “the magnificent seven” in, among other things The business world recently. They account for an increasingly large part of economic growth in the world.
Some warnings have come from those who believe that what we have become is too vulnerable by relying on just a number of companies to carry the economy.
Bubbles and bouncy castles?
When the US stock markets fell this week was Dan Wantrobski at the financial analysis firm Janney Montgomery Scott, is quick to warn that the market appears saturated – and overbought.
“This creates a very large vulnerability for a decline in the coming weeks,” he told the Bloomberg news agency recently.
But it is rather a notch in the curve: The seven kingdoms at the top of the stock market sit unthreatened on their throne – for the time being.
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Three aces up his sleeve
– They have three things that you shouldn’t forget. They have strong and smart investors behind them. They succeed in attracting competence and talent, which is a prerequisite. And they renew quickly, Hanna Andreen tells Nyheter24, says Hanna Andreen to Nyheter24.
The concentration of capital around these companies has not least to do with the fact that they succeeded in building up centers like Silicon Valley where the money, skills and speed could be gathered in one and the same place.
Ecosystem
In the ecosystem around and between the magnificent seven, it is difficult to imagine any big upstart that overtakes or even out-competes Tesla, Meta or any of the other companies.
On the other hand, it may be wise to remember that many of the companies did not even exist a few years ago.
Facebook was founded in 2004, Google was founded in 1998 and Nvidia was founded in 1993. Although none of the companies then looked much like they do now.
– You can imagine that a company like OpenAI could rise among these giants. But even if they were to grow and only reach half a percent of Google’s market value, that would mean an enormous increase in value. It’s an incredible amount of money, says Hanna Andreen.
Flat Capital buys into AI companies
Flat Capital has announced on Monday that at the end of 2023 it bought into Perplexity with SEK 3 million. The company uses ChatGPT as the basis for a search platform – a so-called Large Language Model, LLM.
– It is a small amount of money, but it looks very attractive. It looks like it could be both a profitable and exciting example of what AI can do.
The American financial market has proven to be a perfect breeding ground for the tech century. With the help of capital, skill clusters and a propensity to take risks, a tech sector has been seen to emerge that would not have been possible otherwise.
What has happened? Tech has happened!
– In general, you can say that the USA has gone from accounting for 30-40 percent of the world’s global market capitalization, to 70 percent. And what has happened to make it possible? Tech has happened, is the answer to the question.
However, it would not have been possible without investing broadly.
By investing widely in startups and tech companies, the US has been able to give many companies the chance. Some fail, others become hugely profitable.
You don’t know that beforehand, but it’s about a fearless approach to risks and opportunities, says Hanna Andreen.
Safe harbors
In the past three years of global unrest and rising interest rates, investors have become less risk-averse. People have become less eager to invest widely and instead want to put their money in safe harbors that they know generate money – as Google and Facebook do reliably year after year.
This has made the giants even bigger, and stock prices rise when the companies are sought after on the stock market.
The big companies will not collapse in competition with some new giants.
– These companies have proven themselves over many years through profitable growth – they are not castles in the air. The most likely thing is that they buy up, collaborate with or hire those who will lead us into the AI-generated future, says Hanna Andreen.
The risks have their price
But there is a possibility that individual AI companies that have not yet been formed will sail up and join the magnificent seven at the top of the stock market.
But risk is not just opportunity.
In 2022, it was revealed that the Swedish pension manager Alecta invested large sums of the Swedish occupational pension savings in American niche banks such as Silicon Valley Bank, which went under due to the interest rate increases and the recession.
Billions that the Swedish pension savers will probably never see again.
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