Ever since the release of OpenAI’s new chatbot ChatGPT in November, investors have been enamored with A.I. and its potential to revolutionize the world’s economy. Hopes for a future with increased productivity and lower costs as A.I. tools are rolled out to the masses have helped to lift markets in 2023 despite stubborn inflation, rising interest rates, and consistent recession predictions from economists. After dropping more than 30% in 2022, the tech-heavy Nasdaq Composite has recovered nearly all of its losses, gaining over 28% year to date, and the S&P 500 is now up more than 12%.
While some on Wall Street question whether stocks can continue their run of form in the second half of the year, pointing to stretched valuations in the Big Tech names and A.I. plays that have led the rebound so far, Wedbush’s top tech analyst Dan Ives argues it’s just the beginning of the “A.I. gold rush.”
“Many of the tech skeptics will point to today as a ‘1999 moment,’ à la on the verge of the dotcom bubble/collapse, given the significant move in tech valuations. We strongly disagree,” the veteran analyst wrote in a Monday research note. “While valuations in tech will be front and center, we continue to believe A.I. is driving the tech sector to a ‘1995 moment’ with a long runway of growth ahead that we have not seen since the 1990s.”
