Tom Lee, one of Wall Street's biggest bulls and former chief stock strategist at J.P. Morgan Chase, said the global labor shortage is expected to reach 80 million by 2030, which will significantly boost technology stocks.
The current head of research at Fundstrat Global Advisors said he expects the share of technology stocks in the S&P 500 index to increase from the current 30% to 50%. This prediction is based on the potential of artificial intelligence to increase productivity and address impending labor shortages.
“The golden age workforce is growing at a slower rate than the world's total population. By the end of this decade, this gap will reach around 80 million. So, unless artificial intelligence brings about a boom in productivity, it will put a lot of pressure on companies or motivate them to innovate. That means you're going to see a shift from annual wage spending to silicon spending,” Lee said.
He estimates that in order to cope with the growing labor shortage, companies will invest a total of about 3.2 trillion US dollars in artificial intelligence technology every year. He also stressed that Nvidia, with annual revenue of close to $100 billion, would greatly benefit from this increased expenditure.
Lee notes that the possibility of labor shortages driving tech stocks to soar is not a new phenomenon. He mentioned previous examples of global labor shortages, such as the period from 1948 to 1967 and 1991 to 1999, which all led to a sharp rise in technology stocks.