The hype around artificial intelligence is only getting stronger, if company statements are anything to go by.
The number of press releases that mentioned “artificial intelligence” or “AI” climbed to 533 among the S&P 500 companies in the fourth quarter, Dow Jones data show. That’s up from 360 for the third quarter and 353 in the third quarter the previous year. If you add in filings with regulators and transcripts from calls, mentions of AI climbed to 953 in the fourth quarter, higher than any three-month period in the past two years.
The AI phenomenon has driven shares of companies such as
Nvidia
and
Palantir
through the roof. It has the potential to spread to other industries outside technology if companies can harness it to improve productivity and profits over the next few years. Even companies such as
McDonald’s
like to mention how AI will transform their operations.
Of course, the rapid emergence of AI as an investing theme has led some to worry about when it will be overblown. Louis-Vincent Gave wrote last week that AI has become a dominant market narrative, along with the idea that the Chinese economy will continue to perform poorly.
“Standing in front of a runaway narrative usually makes about as much sense as standing in front of a runaway train,” Gave wrote in a Feb. 15 note. “Nevertheless, for an investor it makes sense to hypothesize about what might turn these narratives around.”
He said that disappointing sales, increased regulation, higher energy prices, or greater geopolitical tensions such as war between China and Taiwan could put an end to the AI rally. Valuations for many AI stocks already seem very high, he noted.
For now, investors are still getting paid to hitch themselves to the AI wagon. The next big event will be when
Nvidia
reports earnings later this week.
Write to Brian Swint at [email protected]
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