Artificial intelligence and the fear of being left behind | a job

Artificial intelligence (AI) disrupts the behavior of the markets. ChatGPT, an AI-powered language model, was adopted at a speed unprecedented in the history of the technology, spurring renewed investor interest in its transformative power. Reflection is a capitalized path…

Artificial intelligence (AI) disrupts the behavior of the markets. ChatGPT, an AI-powered language model, was adopted at a speed unprecedented in the history of the technology, spurring renewed investor interest in its transformative power. One reflection is Nvidia’s capitalization trajectory. This company, known for its production of Graphics Processing Units (GPUs), is up 190% in the stock market in 2023.

This event can be explained by behavioral psychology. a phenomenon known as FOMO (Fear of missing outor fear of being left behind). This feeling manifests itself when investors fear missing out on opportunities that are seen as highly profitable. The buying flow and, therefore, its effect on price is so high that excessive valuations can be reached which may not be sustainable in the long run (a PER of more than 50 times requires an increase in profit of 150%, and a PER of 100, of 400%). The fact that the world’s seven largest companies (Apple, Microsoft, Alphabet, Amazon, Nvidia, Tesla, and Meta) account for 50% of the MSCI ACWI’s first half 2023 performance illustrates this phenomenon. This focus is further highlighted in the S&P 500: this summit 7 represents 75% of the index’s return. Thus, the technology sector is the sector that experienced the most appreciation in 2023: during the first semester, it generated almost twice as much as the global stock market estimated.

Focus on those Big tech This is due to its exceptional orientation towards artificial intelligence. Among the most prominent examples is Nvidia, which has positioned itself as the primary provider of hardware Needed for artificial intelligence. Tesla, for its part, is at the forefront with developing its own self-driving technology. Meanwhile, Apple has been able to effectively integrate AI into its virtual assistants and Microsoft continues to implement in its office tools. The United States leads the way in the development of artificial intelligence, home to many large companies and startup companies, and has a large number of resources devoted to research and development. But China, India, Israel, the European Union and Canada are also making significant investments in AI and could present attractive opportunities. We may be facing the biggest technical disruption since the inception of the search engine. This, of course, should be reflected in the market price. However, since there are still so many unknowns, it is very likely that many inefficiencies are currently being created in the equity markets, which the most intelligent active managers will be able to take advantage of.

Follow all information for Economy And a job in Facebook And Twitteror on our site The weekly newsletter