Accelerated growth, double-digit productivity gains, profits in the billions: artificial intelligence (AI) is raising considerable expectations in all sectors of the economy. Since November 2022 and the advent of the ChatGPT conversational robot, AI has become a central issue for investors, to the point of wondering if it is not already too late to position oneself. “This theme dominates our discussions with clients,” explains Raphaël Thuin, head of capital markets strategies at Tikehau Capital. “How to invest and take advantage of this trend? Is it sustainable? These questions are at the heart of their concerns.”
The increase in mentions of the term during company discussions with their investors clearly illustrates this craze. According to data management company FactSet, in the second quarter of 2024, 210 of the 500 companies in the S&P 500 mentioned AI when presenting their financial results, after a record of 211 at the start of the year. They were on average only 88 to talk about it over the last five years.
A revolution for a host of professions
To take advantage of this revolution, investors have two options: turn to specialists like Nvidia, whose chips are crucial to providing the computing power necessary for AI, or opt for companies where AI is a lever of growth, without being a dependence, like Google and Microsoft, or even more traditional companies which play a key role in its deployment. The latter have multiple activities, making them less dependent on this single sector.
The McKinsey firm estimates that AI could not only generate billions in annual profits in industries such as finance, technology or life sciences, but also increase the added value of marketing, sales or management professions. ‘engineering. For its part, the investment bank Goldman Sachs estimates future investments in AI-related infrastructure, such as data centers, chips and electrical networks, at nearly $1,000 billion. With, at the end of the day, juicy profits for the companies benefiting from it. “This technological revolution benefits the entire value chain, allowing companies to accelerate their working methods, optimize their processes and transform consumption patterns,” estimates Alexandre Hezez, strategist at the Richelieu Group.
The interest of thematic funds
So many reasons which have encouraged certain management companies to launch specialized funds on this theme, thus avoiding individuals having to select the stocks in which to invest themselves, which is not always easy in the technology sector. Among the largest in terms of assets, according to Morningstar data, are Allianz Global Artificial Intelligence (Allianz GI), Amundi MSCI Robotics & AI ESG Screened UCITS ETF (Amundi) and Echiquier Artificial Intelligence (La Financière de l’Echiquier) . Technology funds are also a good way to gain exposure to this dynamic.
“History teaches us that we must be careful in choosing which actions to favor,” warns Alexandre Hezez. Wisdom shared by Jacques-Aurélien Marcireau, co-head of equity management at Edmond de Rothschild AM, who highlights the tendency of markets to overestimate short-term impacts, while underestimating long-term ones. “With the Internet, we had to wait almost twenty years for the promises of the late 1990s to materialize,” he recalls.
Without ruling out possible disillusionment, Jacques-Aurélien Marcireau nevertheless notes a major difference with the Internet bubble: the companies affected today by AI are financially solid. “This is why we believe that there will not be a massive wave of bankruptcies, like in the 2000s. On the other hand, strong stock market corrections remain possible,” he warns. Especially since these titles are already very well valued. If artificial intelligence constitutes an essential investment theme, with undeniable potential, it may be wise to wait for the blow to settle down a little before positioning yourself.
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