#092 Why AI is the Key to Investing in Tech for 2024 and Beyond?
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AI BYTE #1 📢: Why AI is the Key to Investing in Tech for 2024 and Beyond?
⭐ AI is not just a buzzword anymore. From cloud computing to personal assistants, from self-driving cars to smart homes, AI is everywhere.
And it is creating new opportunities for investors who want to capitalize on the next wave of innovation in tech.
To get some insights on how to invest in AI and tech stocks, listen to what Jonathan Curtis has to say. Jonathan is the Chief Investment Officer of Franklin Equity Group and lead Portfolio Manager of the Franklin Technology fund.
Curtis has over 30 years of experience in the tech sector, both as a software engineer and as a stock picker. He has been managing the Franklin Technology fund since 2008, and has delivered impressive returns by betting on the so-called Magnificent Seven, a group of top-performing tech companies that are leading the AI revolution.
The Magnificent Seven are Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla. Curtis owns six of them in his fund, and believes they will continue to do well, thanks to their strong AI capabilities, balance sheets, and profitability.
But he also expects the strength of these giants to broaden out to other tech companies, especially those that cater to the enterprise market and leverage AI to improve productivity, efficiency, and innovation.
Curtis is particularly bullish on Microsoft, which he thinks has the most comprehensive AI strategy among the Magnificent Seven. He cites Microsoft’s investment in OpenAI, a research organization that aims to create Artificial General Intelligence (AGI), as a game-changer for the company.
He also points to Microsoft’s Copilot, a tool that uses AI to help software developers write better code, as a potential catalyst for a new business cycle in tech.
Curtis also likes Nvidia, the leading maker of Graphics Processing Units (GPUs) that power AI applications. He thinks Nvidia’s GPUs are in high demand and short supply, as more and more companies adopt AI tools to enhance their products and services. He expects Nvidia to benefit from the growth of AI in various domains, such as gaming, cloud, automotive, healthcare, and education.
Besides the Magnificent Seven, Curtis also owns several smaller and mid-cap tech stocks that he thinks have strong AI stories. Some of his favorites include Advanced Micro Devices, ASML, Synopsys, Snowflake, and GitLab. He believes these companies have unique advantages in their respective markets, and can provide value to customers and shareholders alike.
Of course, investing in AI and tech stocks is not without risks. Curtis acknowledges that there are some challenges and uncertainties facing the sector, such as regulatory pressures, geopolitical tensions, competition, and valuation.
He warns that AI adoption may take longer than expected, and that some companies may fail to deliver on their promises. He advises investors to be selective and diversified, and to focus on the long-term potential of AI.
AI is not a fad. It is a fundamental shift in the way we create and consume technology. It is also a huge opportunity for investors who want to be part of the future.
As Curtis puts it, “AI is a board-level priority. That says to us that we’re at the start of a business cycle in tech, and we think it is going to be a profound one, because the opportunity in AI is so significant that it touches every bit of creative work.”
Disclaimer - Above article is not investment advice.