the main points
There's a whole world of stocks beyond flashy AI names like Nvidia for investors looking to ride the latest technology wave, according to investment firm Fidelity International. These indirect AI plays include semiconductor foundries, packaging technology companies and memory companies, investment firm Fidelity International said. Wednesday report. “Instead of focusing on so-called hot AI stocks — because today's big names may not be tomorrow's winners — investors might consider the many indirect beneficiaries, or diversified companies, where the benefits of AI may not be immediately obvious to investors,” she said. Fidelity in its report. The report highlighted similarities between the current hype around AI and the “Internet Age” before the dot-com bubble burst: “Internet stocks were the ‘hot stocks’ of the time, and while there were some successful companies, many failed. In our view “Artificial intelligence will continue.” “It follows a similar trend,” Fidelity analysts said. As such, it encouraged investors to look further afield to invest in. The AI boom that began with the launch of ChatGPT in November 2022 has been a particular boon for Nvidia, whose GPUs are used to train and run its chatbot. The chip designer's shares have risen nearly 280% in the past year. However And, looking beyond Nvidia, stocks in AI-related sectors identified by Fidelity have also been on the rise. Shares of Taiwan Semiconductor Manufacturing Co., the world's largest foundry and Nvidia supplier, have risen more than 50% in the past year. Meanwhile, shares of South Korean memory chip giants Samsung and SK Hynix rose more than 25% and nearly 100%, respectively. Memory chips are needed to train large language models like ChatGPT to process massive amounts of data and create human responses to user prompts. Non-profits also witnessed Other direct suppliers, such as suppliers of chip equipment and AI servers, saw big gains. Shares of Nasdaq-listed Super Micro Computer, a supplier of advanced AI servers for data centers, rose about 1,175%, as did shares of Dutch chip equipment manufacturer ASML, which supplies… TSMC owns important lithography machines for making chips, by 53%. % in the last year. Fidelity also said it's worth considering software and services companies. “Unlike consumers who can adopt new technology very quickly, adoption among businesses is much slower. This is where these companies can help, in areas such as data services, integration and governance,” the report said. Client services companies, business process outsourcing, and music content companies can also provide opportunities, Fidelity said, as they “embrace and adapt to artificial intelligence.” “Digitization leaders and enablers in the manufacturing, industrial and construction sectors, where technology is still very underpenetrated, look interesting,” the report said. “We also believe that design software companies have an important role to play in the long term.”
