Nasdaq-listed US technology companies had a terrible year last year. As a result of the 32% decline in the Nasdaq 100 index, 2022 was one of the worst years for US indexes since 2008. The US Federal Reserve rising interest rates and the return to work following the COVID-19 lockdowns were terrible news for tech businesses that weren’t prepared for the change in work techniques. However, emerging AI innovations like ChatGPT can be advantageous.
The state of artificial intelligence is continually evolving, and ChatGPT is far ahead of the competition. And if you are the kind to invest in US markets as part of your diversification, you should consider companies that are funding AI projects. The “Imitation Game” or “Turing Test” was developed in 1950 by Alan Turing, who is credited with establishing theoretical computer science and is sometimes referred to as the father of artificial intelligence. It was created to determine whether a machine could exhibit behavior that seemed intelligent and was equivalent to that of humans. After Google’s LaMDA in June 2022, ChatGPT is the second chatbot to pass the Turing Test in December 2022. Even though we have been hearing about and using AI in our daily lives for a while, Alphabet’s LaMDA and OpenAI’s ChatGPT are indications that technical innovation has reached a critical turning point.
It’s crucial to keep in mind that AI will probably change and disrupt every area of the economy. Businesses that are disruptors will succeed in terms of sales, earnings, cash flows, and enterprise values as the world changes. Others risk losing customers and, hence, valuations. By increasing their exposure to AI-driven companies, investors must make sure their portfolios are prepared for this new turn of events. Now, ChatGPT can have an impact on your stock holdings. It’s possible that by 2030, a larger proportion of the market capitalization of the S&P 500 will be made up of AI-driven companies. Like in soccer, the competent player goes to where the ball is, whereas the great player goes to where the ball will be.
For investors who are interested in the US IT business, 200–300 US-listed companies are working on AI or related technologies, such as the Internet of Things (IoT), 5G, cyber security, Blockchain, Metaverse, etc. You should choose a portfolio of 15 to 25 companies from this list of stocks using a technique analogous to a scientific investing framework based on their financial soundness, growth potential, and pricing.
