Bank of America: The days of AI speculation are over, investing in US stocks looks to strong AI monetization companies
Bank of America stated that as the market shifts towards evaluating investment returns, the era of hype around artificial intelligence has ended. Investors looking at US stocks are turning to strong AI monetization companies such as ServiceNow and Adobe. The expected capital expenditures in the field of artificial intelligence by mega-cap companies like Microsoft, Meta, and Amazon have been revised upwards by $18 billion. It is projected that by 2024, the capital expenditures of mega-cap companies will account for the majority of the S&P 500 index's capital expenditure growth, reaching $198 billion
According to Zhitong Finance, this week, tech giants including Microsoft (MSFT.US) will successively release quarterly financial reports, with a further focus on the artificial intelligence theme. Bank of America stated that the market is shifting towards evaluating the return on investment in this continuously evolving technology. She said, "As artificial intelligence transitions from 'tell me' to 'show me,' companies that clearly monetize artificial intelligence are likely to lead the trend from here."
Savita Subramanian, head of U.S. stock and quantitative strategy at Bank of America, mentioned that the artificial intelligence investment cycle may continue, but the days of hype around artificial intelligence are over. She noted that over the past 12 months, the market has been in the phase of 'tell me' regarding artificial intelligence. Subramanian cited ServiceNow (NOW.US) and Adobe (ADBE.US) as examples of companies that monetize artificial intelligence, with both companies' stock prices rising after the latest financial reports.
In a report, Bank of America stated that the expected capital expenditures in the field of artificial intelligence for so-called mega-cap companies such as Microsoft, Meta (META.US), and Amazon (AMZN.US) have been revised upwards by $18 billion, while sales forecasts have only increased by $2 billion since March. In other words, for every $1 increase in sales, artificial intelligence capital expenditures will increase by $9.
By 2024, the capital expenditure growth of mega-cap companies Alphabet (GOOGL.US), Microsoft, Meta, and Amazon is expected to account for the majority of the S&P 500 capital expenditure growth, reaching $198 billion. Subramanian noted that historically, companies in a reinvestment cycle have underperformed.
