In the Spotlight Trend of the Month
AI chatbot ChatGPT was launched a little over two years ago. And it was an immediate success, with the app picking up its first one million users in just five days.
Fast forward to today and ChatGPT has become a global phenomenon, transforming the way in which we interact with technology and reshaping industries across the board. What’s exciting, however, is that generative AI is just getting started.
For many of us today, ChatGPT is now an indispensable tool that we rely on to make our lives easier.
It’s used by individuals and businesses around the world for a wide range of tasks, ranging from drafting emails to generating computer code. Currently, the app has around 300 million weekly active users, which illustrates its immense popularity and widespread adoption. In total, it processes around one billion queries per day. It’s worth pointing out that several Big Tech companies have their own generative AI apps and these are popular as well.
For example, Alphabet’s Gemini currently has around 40 million users, while Meta’s Llama has had around 650 million downloads.
Also, getting in on the action is Amazon, which just announced the release of Amazon Nova. This is a suite of very powerful foundation models that are designed to help customers build innovative applications and solve complex problems.
Looking ahead, generative AI is likely to advance rapidly in the years ahead and become even more useful.
In the coming years, consumers will be able to use the technology to make travel bookings and plan their vacations, monitor their health and personalise their healthcare, obtain tutoring and learn new skills, and much much more. Ultimately, the possibilities are endless. So, there’s a lot to be excited about.
From an investment perspective, the AI theme continues to generate opportunities for investors.
In December, for example, Broadcom stock surged after CEO Hock Tan said that AI could be a $60–$90 billion opportunity for the chip company by 2027. AI requires a lot of computing processing power and Broadcom — which makes custom chips for the likes of Google and Meta — is a specialist here. Amazon stock also performed well in December after the company unveiled its new “Trainium3” chips. These are very powerful computer chips designed specifically for AI workloads. Amazon plans to position these chips as a cost-effective alternative to Nvidia’s costly GPUs. Currently, Apple is investigating whether Amazon’s chips can be used for its AI application, Apple Intelligence.
It should be noted that AI also consumes a lot of energy.
As a result, utilities companies are coming into focus. Believe it or not, utilities was one of the best-performing sectors of the S&P 500 in 2024. Stocks that did well here included Vistra Corp and Entergy Corp.
Going back to ChatGPT, revenue generated by its developer, OpenAI, is rising rapidly.
For 2024, the technology firm expects to generate revenue of $2.7 billion, up from $700 million in 2023. This incredible level of top-line growth has led to a sharply higher valuation for the company. In October, it raised $6.6 billion from a number of investors — including Microsoft and Nvidia — putting its valuation at $157 billion (versus $14 billion in 2021). To put that figure in perspective, that’s nearly as high as the market cap on the 50th-largest company in the S&P 500 Index today. If OpenAI was to announce an IPO, it would most likely generate a huge level of excitement within the investment community. At this stage, however, the company has no plans to go public.
Those looking to capitalise on the growth of the AI industry may want to check out eToro’s AI-Revolution Smart Portfolio. This provides broad exposure to the artificial intelligence ecosystem, offering access to hyperscalers, chip designers, software businesses, cybersecurity companies, and more.
Other Smart Portfolios that offer exposure to the theme, and could be worth a look include Chip-Tech, Cloud Computing, and Utilities.
