What's Next for the AI Boom?
Retail Investors Showing Reduced Interest in AI Stocks
Vanda Research analysts have reported that investors might be losing interest in the popular artificial intelligence trend, however, they are still holding on to their $NVIDIA(NVDA.US)$ stocks. And they've also noticed fewer news stories covering the sector as well.
The analysts shared a chart of their recent weekly data which indicates a decrease in retail investors' net purchases of AI-themed stocks.
Source: Bloomberg, Vanda Track
Investor enthusiasm for AI-related stocks and technology has declined in recent months due to interest rate hike worries. However, Vanda analysts do not expect Nvidia to be affected by this trend. Short interest in the company has decreased along with its rising stock price, suggesting that bearish institutional investors may have been forced to cover their short positions. This makes it unlikely that these investors will sell the stock shortly unless they have a strong conviction to do so. The analysts also note that a slowdown in retail demand alone is unlikely to cause significant price movements without active bearish participation from institutional investors.
However, the story is different for smaller AI-related companies such as smaller-cap $C3.ai(AI.US)$. Analysts predict that there will be a continued selling trend for C3.ai in the upcoming weeks. While the AI software group's shares have increased by 154% this year, they have fallen by 9% in recent weeks due to predictions of a larger-than-expected full-year loss despite solid quarterly results. Despite this setback, most of the 10 analysts covering the company tracked by FactSet still maintain a hold or similar rating and are not yet giving up on the company.
Source: Bloomberg, Vanda Track
We believe C3. ai is taking the proper steps to capitalize on Generative AI, but it will take time to prove out," said a team of analysts at Oppenheimer led by Timothy Horan, after those results were released on Sept. 7.
Intel CEO Says the Chipmaker's Technology Is Central to AI Boom
During Intel's annual Innovation conference, CEO Pat Gelsinger stated that the company's technology will be essential to an industry-wide boom in artificial intelligence computing. He emphasized advances in production technology and software developer tools for AI, stating that the opportunity will only grow as more AI capabilities are powered by personal computers.
Shares $Intel(INTC.US)$ dropped on Tuesday following comments made by the company's CFO, David Zinsner, during a meeting with analysts. Zinsner warned that demand for data center chips is recovering more slowly than expected, and the company is seeing longer inventory clearances for data center processors than for PC processors.
INTC IntelPre-Market Trading09/2005:03ET
36.340-4.34%
He added that Intel is likely to see "inventory digestion" in Q3 and Q4 before a turnaround in the data center business. Despite this setback, earlier in the day, Intel's CEO Pat Gelsinger announced plans to release processors for AI capable laptops.
Source: MarketWatch, Bloomberg, Barron's
---
2023/09/22
This presentation is for informational and educational use only and is not a recommendation or endorsement of any particular investment or investment strategy. Investment information provided in this content is general in nature, strictly for illustrative purposes, and may not be appropriate for all investors. Read more