Cristina Ferrero Castaño
Artificial Intelligence will be the new magnet for investors in the stock market, with growth of 40%
The healthcare sector is leading the way in implementing AI solutions in its processes.
July 26, 2021
Present but also the future of the stock market. The technology sector has captured the attention of investors and has been one of the big bets over the last few years, causing the Nasdaq to set record highs and grabbing the media's attention. Rare was the investor who did not recommend investing in some of the big tech companies, but if there has been a branch of technology that has seen an even more meritorious rise, it has been artificial intelligence (AI). A niche that is emerging as a new area of attraction for investors and with potential in the medium term due to its still early development.
Artificial intelligence has emerged as one of the most disruptive topics in recent years and has given continuity and momentum to the technology rally. "Among the main culprits are the technology giants and their firm commitment to making these types of processes more accessible within their business models. From the accessibility of databases to progress in deep learning, the implementation of neural networks, etc. In other words, applying AI in their day-to-day work, which is increasingly being joined by other smaller technology companies," says Juan Esteve, Director of the Research Department at Zonavalue.
Not only in the United States, but also in Europe, more and more companies are becoming familiar with its use, taking advantage of the benefits it offers. More than 35% of them already use it directly or indirectly and nearly 85% consider investment in artificial intelligence as one of their strategic priorities in their business development plans.
If there is one sector that has channelled this appetite for artificial intelligence, it has been healthcare. Robot-assisted surgery or preliminary diagnostics and imaging already frequently apply this knowledge, making it one of the pioneers in its application. In fact, many investors have set their sights on this sector, which has other tailwinds such as the ageing population or the pandemic crisis.
The health sector seems to have taken a lead in the move towards artificial intelligence, but others are lagging behind, but not too far behind. The motor industry is already implementing this technology as a key element in safety, autonomous driving, mobility or energy, in terms of renewables, to improve efficiency and energy production, mitigating the unpredictable components, at the climatic level, of its activity.
"With this cocktail of catalysts, it does not seem unreasonable that the forecasts made by the consultancy Grand View Research, with which we at Zonavalue agree, will be fulfilled, and which predict that Artificial Intelligence will grow at a compound annual growth rate (CAGR) of 40% in the stock market during the period 2021-2028. This is a clear sign that the potential is enormous and that there is still much to explore. In fact, the Stoxx AI Global Artificial Intelligence, one of its benchmark indices, has soared slightly above this percentage in the last twelve months (+43%)," says the Zonavalue expert.
The stock market performance of artificial intelligence has also brought to light another pillar that investors like a lot: the de-correlation with respect to technology. If the forecasts come true, its potential will be double that of the main tech companies and will confirm the trend experienced after the impact of Covid-19 on the markets, given that while the Nasdaq has barely risen since February, the AI sector has risen by more than double digits.
"Therefore, artificial intelligence is emerging as the ace up the sleeve that not only the big tech companies but also investors are betting on in the face of the proliferation of big data, the increase in computing power and greater accessibility to data in the cloud. For example, Jeff Bezos himself has, on countless occasions, highlighted the benefits of AI for Amazon as it allows them to detect anomalies or fraudulent activities through its predictive models, which identify potentially fraudulent sales transactions. If almost all of us buy through their e-commerce, why not also follow in their footsteps and ride the AI wave," says Juan Esteve.