Investors are currently showing a significant preference for tech stocks while treading cautiously with artificial intelligence (AI) investments, according to the latest Markets Live Pulse survey.
Out of the 514 respondents, 77% were looking to increase or maintain their exposure to technology stocks in the next six months. This bullish sentiment has propelled the Nasdaq 100 to a remarkable performance, experiencing its best first half ever, leading to soaring market valuations.
However, despite the current tech rally, investors’ reaction is a degree of skepticism towards AI’s immediate prospects. While survey participants were benefiting from the AI-fueled market surge through their broader equity investments, many were hesitant to fully embrace AI technology just yet.
And, about half of the respondents were not willing to invest in AI tools for personal or business use, and a majority of firms were not planning to adopt AI for trading or investing purposes.
This hesitancy has stemmed from concerns about AI’s profitability and its ability to deliver on the hype surrounding it. The survey revealed that the majority of investors had remained unconvinced about AI’s potential to revolutionize core aspects of their work in the next three years.
This skepticism extends to the broader economy, with Goldman Sachs economists predicting that while AI might impact the jobs of seven in 10 US workers, only a small fraction of those jobs would be entirely replaced by new technologies.
“I think this is going to turn out to be something like the Roaring 2020s,” Bloomberg quoted Ted Mortonson, a technology strategist at Robert W. Baird & Co, as saying in an interview.
While tech stocks like Apple Inc. and Microsoft Corp. are thriving, and companies like Nvidia Corp. are experiencing remarkable success with AI-driven products, the survey results indicate that investors are taking a wait-and-see approach before fully committing to AI ventures. The AI market, though promising, is still in its early stages, and practical applications are yet to mature fully.
Industry leaders like Microsoft and Alphabet Inc. are introducing AI features into their products, attempting to entice corporate clients with productivity-boosting tools. However, the path to profitability for AI companies remains uncertain, and the challenge lies in proving that AI investments will translate into tangible and sustainable returns.
AI, robotics, neuroeconomics, and quantum computing are paving the way forward, but the road for AI ahead seems slightly tougher.