Generative AI Is As Transformative As The Telephone, Bank Of America Says: 10 Stock, ETF Trading Ideas
Portfolio Pulse from Chris Katje
Bank of America has highlighted the transformative potential of generative artificial intelligence (AI), comparing its impact to that of the telephone, automobile, personal computer, and internet. The bank's analysts predict that AI could generate $15.7 trillion in economic impact by 2030 and that AI-driven efficiencies and revenue could appear across sectors globally within the next 3-5 years. Several stocks and ETFs are identified as potential beneficiaries of this trend, including Nvidia, IBM, Sweetgreen, Adobe, Workday, Meta Platforms, Morgan Stanley, and three ETFs: Global X Robotics & Artificial Intelligence ETF, Global X Artificial Intelligence & Technology ETF, and iShares U.S. Tech Breakthrough Multisector ETF.
October 11, 2023 | 4:43 pm
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POSITIVE IMPACT
Adobe's GenAI application Firefly could bring in an extra $1 billion in revenue for the company in fiscal 2024.
Adobe's Firefly application is expected to bring in significant additional revenue, as it is being embedded into the company's Creative Cloud product line and is leading to increased subscription prices.
CONFIDENCE 65
IMPORTANCE 70
RELEVANCE 75
POSITIVE IMPACT
The Global X Artificial Intelligence & Technology ETF is recommended as the top diversified ETF for exposure to AI.
The Global X Artificial Intelligence & Technology ETF is expected to benefit from the growth of AI, as it provides diversified exposure to companies in the AI sector.
CONFIDENCE 40
IMPORTANCE 45
RELEVANCE 50
POSITIVE IMPACT
The Global X Robotics & Artificial Intelligence ETF is recommended as the best pure-play for the generative AI revolution.
The Global X Robotics & Artificial Intelligence ETF is expected to benefit from the growth of AI, as it provides exposure to companies in the AI and robotics sectors.
CONFIDENCE 45
IMPORTANCE 50
RELEVANCE 55
POSITIVE IMPACT
IBM's Watsonx GenAI platform could drive incremental revenue streams and efficiencies.
IBM is leveraging its Watsonx GenAI platform and chatbots to drive efficiencies and increase productivity, which could lead to significant revenue gains.
CONFIDENCE 75
IMPORTANCE 80
RELEVANCE 85
POSITIVE IMPACT
Meta Platforms could see improved engagement and monetization on its platforms through the transformation of AI tools.
Meta Platforms is using AI-recommended content on its platforms, which has led to an uptick in time spent on its social media platforms. This could boost the company's ad revenue.
CONFIDENCE 55
IMPORTANCE 60
RELEVANCE 65
POSITIVE IMPACT
Morgan Stanley's planned AI-powered chatbot could give the company a competitive advantage and reduce the time needed for research reports and client engagement.
Morgan Stanley's planned AI-powered chatbot could streamline its operations and give it a competitive advantage, potentially boosting its profitability.
CONFIDENCE 50
IMPORTANCE 55
RELEVANCE 60
POSITIVE IMPACT
Nvidia, a major player in the AI GPU market, is expected to see new revenue streams from its AI strategy.
Nvidia's chips are heavily used in AI tasks, and the company controls around 75% of the AI GPU market. This positions it well to benefit from the growth of AI.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
POSITIVE IMPACT
Sweetgreen is using AI to automate operations and improve customer experience, which could lead to cost savings and increased productivity.
Sweetgreen's use of AI in its Infinite Kitchen concept is expected to reduce labor costs and increase food production, which could boost the company's profitability.
CONFIDENCE 70
IMPORTANCE 75
RELEVANCE 80
POSITIVE IMPACT
The iShares U.S. Tech Breakthrough Multisector ETF is recommended for exposure to AI companies.
The iShares U.S. Tech Breakthrough Multisector ETF is expected to benefit from the growth of AI, as it provides exposure to tech companies that are making breakthroughs in the sector.
CONFIDENCE 35
IMPORTANCE 40
RELEVANCE 45
POSITIVE IMPACT
Workday's investment in AI could pay off with incremental revenue streams from products like AI Marketplace and Workday AI Gateway.
Workday has been investing in AI since 2020 and is expected to see returns from this investment in the form of incremental revenue streams from its AI-based products.
CONFIDENCE 60
IMPORTANCE 65
RELEVANCE 70