The emergence of generative artificial intelligence (IAG) has propelled the companies that have opted the most for it, such as Nvidia, Microsoft, Alphabet, Amazon and Meta, which have registered strong increases in their price in the last year. A trend that can also have a positive impact on the sectors and companies that best know how to take advantage of the opportunities offered by this new technology.
Knowing how to identify them and include them in your investment portfolio can make a difference. The first key to getting it right, explains the independent financial advisor and founder of Nextep Finance, Víctor Alvargónzález, is to detect where this impact "is going to be noticed first." Manufacturers and early developers of IAG solutions are currently the ones with the advantage.
This is the case of Nvidia, which produces IAG chips and one of the most bullish values on the Nasdaq-100 in the last year. "It is the one that has risen the most so far, but it does not have to be the one that ends up benefiting the most," warns the advisor.
There are other industries in which this technology can make a strong impact and improve productivity, such as banking, due to its financial capacity to address the large investment involved in its implementation. "But will the market see it that way or will it prefer the potential impact on other sectors such as consumer goods or energy? That's what it means to anticipate investor preferences," adds Alvargonzález.
According to a survey by strategic consulting firm McKinsey, the technology and financial services industries are the most likely to introduce changes through the IAG. “While all sectors are likely to experience some degree of disruption,” the report reads, “industries that rely more heavily on knowledge work are likely to be more disrupted and potentially realize more value.”
The consultancy estimates, however, that the IAG will have a greater impact - adding value equivalent to 9% of global industry revenues - in knowledge-based sectors, such as banking, pharmaceuticals and medical products, as well as education. While the consulting firm Accenture highlights the range of possibilities that this new technology opens up for banking and insurance, retail, energy and software.
To make the IAG profitable, Alvargonzález indicates that first "we must be clear about the potential of this new technology"; secondly, "identify which sectors are going to benefit first", and thirdly, have professional advice if you do not have sufficient knowledge about this type of investment. Finally, he recommends working with financial entities and platforms that allow access to a wide variety of funds and ETFs, which will also make it possible to invest in very specific sectors or niches.
"Those who did not invest in Microsoft when personal computers arrived; in Apple, when the iPhone arrived, or in Amazon, when electronic commerce began, do not miss the next phase because it will probably be just as profitable if you know how to choose well," adds the advisor.
But the truth is that the stock market always moves ahead of reality, and generative artificial intelligence is no exception. This implies, recalls Eduard Fossas, financial advisor at GVC GAESCO, that "when a sector begins to become fashionable, the market tends to overvalue it." In the case of the IAG, he continues, "we will see the reality in a few years, whether it really has been a revolution as expected or not."
Remember, for example, how the commitment of Mark Zuckerberg, founder of Facebook (Meta), to virtual reality seduced large companies, funds and investors around the world with the expectation that shares would skyrocket, "but that was not the case and suffered a great disaster." It is true, he acknowledges, that later his price was recovering the lost ground. Another example that he gives is the bursting of the "dotcom" bubble at the beginning of the millennium: "A real madness, even more so than now with the IAG. It caused a lot of joy, but in the medium term the falls were tremendous," he recalls. In fact, a year and a half after the crash, the Nasdaq continued to decline and was still 78% less expensive.
For Alvargonzález, however, "the metaverse is not comparable to the IAG." He defends that while the first is simply "a change in interface", artificial intelligence "will mark the fourth phase of the industrial revolution", after those caused by the expansion of personal computers, the Internet and smartphones.
Despite this, caution is always necessary. “In this case there is no bubble at all,” Fossas acknowledges, “but there could be one.” Therefore, with a medium-long term investment horizon, he recommends betting on companies "of proven solvency", which are dedicated to other activities in which they apply the IAG.
Once the companies that will most successfully implement the IAG have been identified, it is time to choose the best time to enter the market. In this sense, Alvargonzález considers that it is necessary to take advantage of the corrections to position itself. But before taking the leap, it will be necessary to analyze the reason for the decrease in the price, "if it is due to an exogenous factor - for example, due to a decision of the Fed or the outbreak of a war - or endogenous - for example, because there is disenchantment with the sector -. "If it goes down for an external reason, it is a good opportunity to enter," he warns. Otherwise, it is better to abstain.
If you opt for the former, Fossas recommends diversifying the portfolio, allocating no more than 5% to investments in generative artificial intelligence due to the uncertainty that still surrounds this new technology and which can, however, leave high returns, even 20%. % or 30%. And as companies consolidate their business, they will progressively increase exposure. “As a new technology, we cannot jump headfirst because if not, great disappointments will come,” he concludes.
