the eyes of ordinary people and investors.
Artificial intelligence has been talked about for many years. According to the report “AI in action: where is the smart money going?” published in May by Deutsche Bank, there were over 175,000 AI patent applications published between 2012 and 2022.
What may be different this time is that the increase in computing power achieved in recent years makes it possible and commercially viable to scale up patented technology ideas in AI, and other emerging areas of tehnology.
Nvidia shareholders are not the only ones who have benefited from this situation. Research and investments in artificial intelligence have multiplied for years under the surface, and many large companies today are trying to position themselves as winners in the race for artificial intelligence in the eyes of investors. A prominent example is Alphabet Inc., the parent company of Google, which has engaged in a massive communication campaign to publicise the numerous applications of AI within its services and, as a result, has outperformed the market even without clear evidence of positive earnings impact for Alphabet shareholders from the innovations.
A flash in the pan?
The markets’ surge has caught many by surprise and can be interpreted in various ways. The positive interpretation, from which investors can learn a lesson, is that technological innovation is a factor of positive surprise in the market and can be so decisive as to overturn even fundamental valuation metrics.
This is significant evidence, as it means its no longer as ssimple as asking whether a stock price is in a "bubble" or not.
Of course, the frenzy around AI has also raised some eyebrows, and many wonder how solid the foundation of this rally is, as a typical characteristic of a hype cycle is that it lifts many boats, well in advance of it becoming apparent wwhich vessels are truly seaworthy.
Is AI here to stay?
The questions we need to ask ourselves, therefore, are: Will the trend of artificial intelligence and innovation continue to positively impact the markets? Which companies will be the winners? And what is the best way for investors to take advantage of it? If we look at various studies, which should be approached with caution, just like long-term analyses, the numbers will surely be tempting.
According to the report “The economic potential of generative AI: The next productivity frontier” published in June by McKinsey & Company, generative artificial intelligence, the technology behind ChatGPT itself, will be the foundation of a new productivity revolution. The study considered 63 use cases of generative artificial intelligence, from customer service to corporate marketing. According to analysts, the increase in productivity can create a value between 2.6 and 4.4 trillion dollars annually (even more than Italy’s GDP, even according to the most conservative projections).
