TLDR:
– Goldman Sachs analysts predict four phases of the AI stock market craze
– Phase Two includes companies like Arm, Microsoft, Amazon, and Cisco
Not just Nvidia: The stocks that AI could boost next
The AI investing craze has heated up in 2024, with Nvidia’s stock alone increasing by 77% since the start of the year. While some analysts warn of a potential bubble, others suggest that big tech stocks are undervalued. Analysts at Goldman Sachs believe that the AI stock market craze will progress through four phases.
Phase Two of the AI trade will focus on companies involved in building AI infrastructure such as semiconductor makers, cloud providers, and hardware makers. Companies like Arm, Microsoft, Amazon, and Cisco are expected to benefit from this phase. These Phase Two stocks have already surged by 14% over the last six months.
Phase Three will involve stocks in companies that generate revenue through AI-enabled software and products. Companies like Meta, Adobe, Intuit, Uber, and Salesforce are highlighted in this category. These Phase Three stocks have seen a 21% increase over the last six months.
In Phase Four, investors will focus on companies that have increased productivity as a result of adopting AI technology. Sectors like software, commercial services, healthcare, financial services, and insurance are expected to benefit from AI adoption. Companies like Moderna, Match Group, Expedia, and MRC Global have been mentioned in this category for their AI adoption in fourth-quarter earnings calls.