The AI Boom that dominated Wall Street throughout 2023 has taken a bit of breather. Over the past few months, many of the market’s most popular AI stocks – like Nvidia (NVDA), Advanced Micro Devices (AMD), Microsoft (MSFT), and others – have fallen from their recent highs.
But the AI Boom is about to restart, and with more vigor that it had before.
There are two big factors at play here.
First, the Fed. Second, corporate investment.
The Fed Calmed Markets
On the first point, the Fed reconfirmed yesterday that interest rates have likely hit a peak and that rate-cuts are still on the table for 2024. That generally eased fears about the Fed potentially hiking rates again in 2024 in response to recent hotter-than-expected inflation reports.
With those fears easing – and rate-cut hopes once again back in the spotlight – the markets should calm down and the recent sell-off we’ve seen in stocks over the past few weeks should end.
Stocks should generally do much better in May and June.
Earnings Show Corporate AI Investment
On the second point, multiple companies have confirmed over the past several weeks in their various quarterly earnings reports that they are investing heavily in new AI technologies, products, and services at the current moment.
Meta (META), for example, basically said it’s going on an all-out spending spree to create the best AI models in the world. Presumably, the firm plans to pump billions of dollars over the next few years into increasing compute capacity and training advanced AI models.
Amazon (AMZN) similarly said it plans to stick with its big investments in AI. Same with Microsoft. And Alphabet (GOOGL).
The world’s biggest companies have spoken. They’re not backing away from the AI opportunity right now, instead they are doubling down on it. They’re pumping more money than ever into the AI Revolution.
The result will be more than ever going to makers of AI chips, operators of AI datacenters, suppliers of components for AI products, and developers of AI software.
The Final Word
In other words…
The multi-billion-dollar Big Tech investment push into AI will create multi-billion-dollar tailwinds for dozens of smaller AI companies over the next few months, just as the macroeconomic backdrop improves in a manner which should support broader stock market strength.
Connecting the dots, it seems clear that well-positioned AI stocks should soar in the coming months.
We have a few that you should pay attention to right now.
In fact, did you know that Elon Musk is working on a secret project that could develop into the biggest story in AI?
And, if he’s successful, it could send a few AI investments surging over the next few years.
Click here to learn more about that secretive project and those AI investments.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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