Question 1

 What is AI?

“AI, or Artificial Intelligence, refers to the development and implementation of computer systems and algorithms that can perform tasks that typically require human intelligence. AI aims to create intelligent machines capable of simulating human cognitive functions such as learning, problem-solving, perception, reasoning, and decision-making. »

Question 2

Which listed companies will benefit the most from AI?

The answer is 1 Google 2 Microsoft 3 Amazon 4 Nvdia and 5 IBM.

When asked about the top 10, the top 5 are joined by Facebook, Alibaba, Baidu and Tencent. When asked about the hardware side of AI, names such as Intel, AMD or TSMC come to the fore.



John Authers from Bloomberg argues that most of the rise of the market year-to-date is due to the top 7 US Artificial Intelligence-related names. For example, on the hardware side, NVDIA, the global leader in Graphic Process Units (GPU) widely used in AI, is up 120% year to date. On May the 12^th, the S&P500 Index ex Big Tech 7 was down 5.2%.

Has AI created a bubble in 2023? According to Michael Harnett from Bank of America who compares the recent rally to recent bubbles like internet in 2000, China in 2008-2010 and more recently bitcoin, biotech and FAANG, the answer is simply no. From a historical perspective, he calls it a “baby bubble".

The same Michael Harnett reminds us that bubbles need liquidity. This has been provided generously by the FED in the last 3 months in reaction to the crisis in US regional banks. We don’t know if it will last. What we know is that it is still early days and apart from Nvdia, AI stocks still trade on historically fair valuation.