Just like the internet and smartphones, artificial intelligence can change the world we live in. And, Bank of America has some pointers for investors looking to play this trend that continues to revolutionize the technology industry. “If data is the new fuel, then AI is the new electricity,” Haim Israel strategist said in a Tuesday note to clients, saying the “iPhone era” of AI has arrived. “We’re at a defining moment – like the internet in the ’90s – where Artificial Intelligence (AI) is moving towards mass adoption, with great language forms like ChatGPT finally allowing us to take full advantage of it.” and the information revolution,” he said. Given this data, Bank of America highlighted 15 stocks poised to benefit from AI in a separate note to clients Tuesday. While Big Tech stocks have taken center stage in the AI arms race, Wall Street banks are looking at semiconductor and software names as a position to move forward. Along with AI frontrunners Alphabet and Microsoft, Bank of America sees Nvidia as one of the main beneficiaries of AI. The chipmaker is no stranger to AI, given its AI-focused chips used for graphics and machine learning. During an earnings call this month, Nvidia CEO Jensen Huang said artificial intelligence has reached a “tipping point,” noting the need for AI to contribute to its success. Bank of America expert Vivek Arya agrees, citing the presence of the company’s mainframe computers as one of AI’s strengths. He predicted that the power of AI could help Nvidia reach $80 billion in revenue and more than $14 in earnings per share by 2027. The AI arms race between global cloud and business customers,” he write. Semiconductor Taiwan is another name that shows the promise of AI. An analyst Brad Lin called the company a “key enabler” for AI, saying that the established business is the first to put “chip systems to the recognition,” with Nvidia among its top customers. Lin added that TSMC is in a unique position to capture additional business opportunities and estimates that, by the end of 2024, at least 44% of revenue will have some exposure to AI . In Big Tech, Bank of America expects Meta Platforms and Apple to benefit. Apple combines AI and machine learning capabilities in features such as Face ID and fall detection. CEO of Meta Platforms Mark Zuckerberg said in on Monday the company z created a new product group in the company to focus on AI products for Instagram and WhatsApp. Analyst Justin Post also pointed to parent Facebook’s large investment in image processing units to build an AI Supercomputer and “discovery engine” filtering relevant content for Reels users as examples of new AI efforts. Post thinks increasing AI capabilities across its business can help Meta Platforms improve its advertising, which has become the largest source of revenue for social media giants. META YTD rock Meta Platforms stock has increased nearly 45% in 2023. “Meta’s large user base should attract content creators, and we believe Meta has the potential for greater content development & targeting vs peers, ” he wrote. Another successful AI in both the business and government sectors is Palantir. Analyst Mariana Perez Mora called the information “new ammunition” that can help the national security agencies better protect against threats. The software company should benefit from increased defense budgets from the United States and its allies as they focus on new technologies to protect themselves from threats. “Palantir’s leading position in the AI-powered software market, end-to-end diversity and proven solutions and first-mover advantages support continued market penetration of AI-powered data solutions throughout across national security and federal civilian agencies and very. regulated companies,” she said. Adobe and Baidu, which plans to launch its own private chatbot, are also included in the Bank of America list. — CNBC’s Michael Bloom contributed reporting
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