2023 has been a remarkable year for artificial intelligence (AI). After years of intense R&D, multiple tech giants launched AI-based products that have added billions to their market capitalizations. Some of the most prominent examples include ChatGPT from OpenAI, Google Bard chatbot from Alphabet, Azure bot from Microsoft, and DGX GH200 supercomputer from NVIDIA. AI technologies are not limited to any one sector, but rather serve as an engine for innovation for a wide range of fields, including medicine, agriculture, consumer electronics, aerospace & defense, and others.
Numerous fundamental improvements have been made in AI over the last two years. Firstly, advanced language models have created generative AI tools that produce complex textual, visual, and audio content. Secondly, AI has expanded to science and education, with the new AI models now aiding hydrogen fusion, improving efficiency of matrix manipulation, and generating new antibodies. Lastly, AI has become self-improving, with NVDIA, Google, and others using their AI models to improve their own AI-based products.
AI revolution has tremendous implication for investors. Companies that embrace AI will create superior new products and processes, which in turn will boost their profitability. Naturally, this will be reflected in the company stock prices as well. Given the scale and effectiveness of AI technologies, the upside potential for relevant equities in medium to long-term is huge. This report aims to present the relevant industry ETF (ARKQ), as well as selected ETF companies that are expected to benefit significantly from further AI innovation.
