Over the next seven years, artificial intelligence may offer investors an opportunity to generate a fortune. Opportunities will be on both the long side and the short side. The key to extracting the most from opportunities in artificial intelligence is to bring sophistication to trading and investing strategies.
We are now in the golden age of artificial intelligence, where the possibilities for growth and innovation are endless. The power of artificial intelligence is already transforming the world through the development of self-driving cars, revolutionizing healthcare, improving productivity in businesses, and changing the way we interact with technology.
Artificial intelligence will bring new advances to every industry, creating opportunities for investors on the long side.
The business models of several existing companies will be disrupted. Stocks of these companies will fall. The best way to take advantage of the fall in the stock prices of such companies is to short sell.
There are four stocks in the Model Portfolio that will benefit from the popularity of ChatGPT.
Microsoft (MSFT) owns a part of OpenAI. OpenAI is using Azure, Microsoft’s cloud offering. Microsoft plans to incorporate ChatGPT in Bing, LinkedIn, and Office applications.
Nvidia (NVDA) makes chips that carry much of the computing workload for AI.
Applied Materials (AMAT) makes semiconductor manufacturing equipment that will be in increasing demand to produce AI chips.
Google (GOOG) has a deep bench in AI. In 2014, Google bought the British AI company DeepMind. Google must also confront the full frontal assault from Microsoft and the $160B search business that is at risk. In spite of Google’s massive expertise in AI, its business model may be challenged by AI. For those interested in more next-level information, please listen to the podcast “Full Frontal Assault: ChatGPT vs. Bard.”
Here are 14 more stocks that are not in the Model Portfolio. These stocks will provide opportunities from both the long and short side.
Marvell Technology Inc (MRVL) produces high bandwidth networking interconnect chips needed for generative AI applications.
Advanced Micro Devices (AMD) is projected to gain a significant share of the AI computing workload.
Taiwan Semiconductor Manufacturing Company (TSM) manufactures chips for NVDA.
Broadcom Inc (AVGO) is producing custom AI chips for hyperscalers such as Google.
ASML Holding (ASML) is a Dutch company that makes advanced photolithography machines used in the production of AI chips.
Intel (INTC) has lagged in its product development, but over the next two years it is likely to catch up. Its chips are projected to carry a significant computing workload for AI.
C3.ai (AI) is a software provider for building enterprise-scale AI applications. It will likely incorporate ChatGPT technology in its offerings.
Baidu, Inc. (BIDU) is the Google of China. It has its own AI bot.
Cadence Design Systems Inc (CDNS) provides integrated circuit design software. Providing computing power to AI is going to become significantly more complicated. CDNS will benefit.
Palantir Technologies Inc (PLTR) provides sophisticated large-scale data analytics to the Department of Defense. PLTR is also gaining large commercial customers. It will be a beneficiary of the golden age of AI.
Stem, Inc. (STEM) is using AI to manage renewable energy assets.
BigBear.ai Holdings Inc (BBAI) develops AI-based tools for the Department of Defense and intelligence services.
SoundHound AI Inc (SOUN) is developing a voice-activated AI tool for automotive and other applications.
Tripadvisor (TRIP) is an online travel agency with comparison shopping. Current users may soon be able to find all of the information they need and book travel through AI-assisted searches being built by tech giants. TRIP presents an opportunity to profit on the short side from disruption.
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