AI STOCKS CONTINUE TO HIT ALL TIME HIGHS?
AI linked companies like Apple, Microsoft, NVIDIA and Intel fight for market share
Artificial Intelligence (AI) has been revolutionizing the world, bringing about major changes in industries and how we live our daily lives. For investors, AI is an exciting but sometimes tricky area to navigate. We'll look at the buzz around AI stocks, and the role of AI stocks such as Intel in this space, and what it means for traders.
THE RISE OF AI STOCKS
AI stocks are basically shares in companies that are deep into AI development and use. These companies can be purely focused on AI, like those making cutting-edge software, or they could be hardware firms such as chipmakers providing the tools needed for AI to work.
• NVIDIA: Famous for its powerful graphics cards, crucial for AI computing.
• Alphabet: Through Google involved in AI research and applications.
• Microsoft: Embedding AI in its cloud services and software.
• Amazon: Uses AI in its logistics, cloud computing
• Apple: To use AI in IOS and latest AI enabled iPhone will be released in September
AI is expected to add trillions of dollars to the global economy in the coming decade, and companies leading the charge could gain significantly. This potential has pushed up AI linked stocks and helped them outperform the rest of the market. This year in particular Microsoft, Apple and NVIDIA have slugged it out in an unprecedented three-way battle to become most valuable company in the world. After a slow start in the first quarter Apple has overtaken both and is currently the leader; the company is worth $3.6 trillion.
INTEL’S POSITION IN THE AI REVOLUTION
Intel, known for its computer processors, is making moves to be a big player in AI. Despite tough competition from the likes of NVIDIA and AMD, the company is investing heavily in AI development. The company currently has around 78% of the Central Processing Unit market. But the company is serious about challenging the dominance of its rivals.
INTEL: DEVELOPEMNETS AND RECENT MOVES TOWARDS AI
Intel has been busy planning or building to chips plants in order to meet increased demand for its products. The company agreed a deal this year with the Israeli government to build a $25 billion chip plant, which will be the largest investment in Israel. The US government has awarded $19.5 billion to the chip producer in grants and loans to boost US chip output. The most significant move is Intel’s release of the Gaudi 3 AI chip which is set to be released in late 2024. Intel expects to outperform NVIDIA rival models and to potential secure more market share.
INTEL AND AI STOCKS: RECENT PERFORMANCE AND EARNINGS SEASON
AI linked tech stocks have outperformed other sectors both this year and last year. Top performer NVIDIA has jumped 160%, Microsoft has increased by 21%, Google has climbed 34%, Apple has increased by 22% and Amazon has grown by 27%. One of the few exceptions has been Intel which fell after a difficult first quarter. But over the past month its stock price has jumped by 13%. The wider Nasdaq 100 which includes all the main AI linked stocks alongside other tech stocks is up by 23%. As a comparison the industrial dominated Dow Jones Index is up 7%. With the earnings season now in full flow, traders are looking closely at financial results of AI linked companies to assess future prospects. At the time of writing, AI lined stocks haven’t declared their earnings, but they will do so from mid-July to end-August.
Conclusion –
The world of AI and the stock market is full of potential, but also risk. AI stocks have performed very well and continue to do so, and Intel’s strategic shift towards AI shows its commitment to being at the centre of the push towards AI development. Beyond the markets, AI’s impact on business and daily life highlights its importance. For investors, staying informed and flexible is key in navigating the volatile world of AI stocks. While some analysts have voiced caution that these stocks might be rising too quickly, it’s a struggle to find anybody who believes AI is a passing phase.