AI Stocks to Potentially Fuel Market Momentum, Defying Inflation Worries

AI hype has influenced stock markets since 2023. Many tech giants saw their stocks rally last year because of artificial intelligence-related projected growth. Market participants now price stock markets to be influenced more by AI than inflation numbers.

AI to Influence Stock Markets More

Stocks might not be greatly affected by inflation until AI hype cools down, according to Michael Antonelli, a Baird market strategist. In an interview with Yahoo Finance, Antonelli says that at present AI is a major factor for stocks and sentiments influencing the share price of many companies. He adds that currently, inflation prints hinted by the CPI and PPI data do not dominate the market sentiments for stocks. Instead, it is the artificial intelligence trajectory for many companies that is driving the sentiments.

AI Stocks See YTD Surge

Most company stocks that have AI exposure have ascended year-to-date, giving an overall surge to Tech stocks. At the press time, Nvidia’s YTD growth stands at a whopping 41%. On the other hand, IBM has seen an escalation of 14% so far this year. The overall rise in AI-related tech stocks has sent Nasdaq up around 5.3% so far this year.

Most publicly listed companies have some or other exposure to AI-related tools and integration at present. However, according to research firm Radio Free Mobile’s founder, companies like Google, Meta, and China’s Baidu don’t have generative AI as a significant revenue contributor today. Present predictions estimate that 2024 should be the year when generative artificial intelligence should start creating traction, traffic, and revenue for big technology companies. This will also be a key observation for markets in the upcoming year.

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AI to Influence Growth in the Future

For a long time, investors have been placing bets on the various companies’ artificial intelligence revenue models. As of 2023, Meta, Amazon, Apple, and Alphabet joined by Microsoft, Tesla and Nvidia now account for 17.2% of the MSCI All Country World Index, according to Money control data. However, the impact of artificial intelligence is expected to go beyond just companies. Artificial intelligence is expected to have a greater influence on future financial markets than stocks or companies.

Presently, countries worldwide are establishing monetary prices to encourage the development of more imports and exports of artificial intelligence. The global artificial intelligence industry is expected to grow at a CAGR of 37.3% between 2023 and 2030. Forbes predicts that China will gain the most from AI. By 2030, the nation’s GDP will have increased by 26%. The GDP of North America will have increased by 14.5% in that same time frame.