AI's 2024 Reality Check: Facing 'Peak AI Hype,' It's Time To Prove Its Worth
Portfolio Pulse from Neil Dennis
AI was a major theme in 2023, with companies like Nvidia, Intel, and AMD making significant gains. In 2024, these companies must demonstrate AI's impact on their bottom lines. Nvidia was the S&P 500's top performer in 2023, while Microsoft invested heavily in OpenAI. Analysts see Nvidia and Microsoft as top AI stocks for 2024. Palantir and CrowdStrike, with their government contracts and cybersecurity applications, also saw substantial gains. However, all mentioned stocks are currently down in early 2024, and their future performance hinges on upcoming earnings reports.
January 03, 2024 | 5:20 pm
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NEUTRAL IMPACT
AMD had a 115% gain in 2023 but is currently down in 2024. Its AI-related earnings results will be crucial for short-term performance.
AMD's short-term stock performance may be neutral as the market looks for evidence of AI's impact on earnings, which may take time to materialize.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
NEUTRAL IMPACT
CrowdStrike's shares rose 134% in 2023, leveraging AI in cybersecurity. Its continued success in this domain will affect its short-term stock trajectory.
CrowdStrike's short-term stock performance may be neutral as the market awaits further proof of AI's effectiveness in driving cybersecurity solutions and revenue growth.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 70
NEUTRAL IMPACT
Intel saw a 73% gain in 2023 but is down in the first sessions of 2024. Its future performance is tied to proving the profitability of AI investments.
Intel's short-term stock performance may remain neutral as the market anticipates concrete financial results from AI investments, which may not be immediately evident.
CONFIDENCE 75
IMPORTANCE 75
RELEVANCE 80
NEUTRAL IMPACT
Microsoft, with a 56% gain in 2023 and a $13 billion investment in OpenAI, is down 1.1% in early 2024. Its AI initiatives' success will be closely watched.
Microsoft's short-term stock performance may be neutral as the market evaluates the financial returns from its substantial investment in AI through OpenAI.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEUTRAL IMPACT
Nvidia, after a 220% gain in 2023, is the S&P 500's top performer but has seen a decline in early 2024. Its performance will depend on demonstrating AI's contribution to earnings.
Nvidia's stock performance in the short term may be neutral as investors take profits from 2023's gains and wait for evidence of AI's profitability in upcoming earnings.
CONFIDENCE 80
IMPORTANCE 85
RELEVANCE 90
NEUTRAL IMPACT
Palantir's stock rose nearly 150% in 2023 but faced a tumble with a poorly received NHS contract. Its AI platform's success will influence its short-term stock performance.
Palantir's short-term stock performance may be neutral as investors assess the company's AI platform's adoption and its impact on financials, despite a recent contract setback.
CONFIDENCE 70
IMPORTANCE 70
RELEVANCE 70