Experienced tech investors are hunting for undervalued opportunities in an overvalued space. At stake is how best to invest in the potential of artificial intelligence, which took a leap forward in November when Microsoft-backed OpenAI released its ChatGPT bot, without buying into a bubble.
Shares in Nvidia, which makes computer chips that train AI systems, have almost doubled since ChatGPT's launch.
The company's stock market value at roughly $940 billion is more than double that of Europe's Nestle. Nvidia surged about 25 per cent on Thursday alone after forecasting a sales jump.
Shares in loss-making AI software company C3.AI, which grabbed the stock ticker, have risen 149 per cent this year and Palantir Technologies, which has launched its own AI platform, is up 91 per cent year-to-date.
Investors are chasing exposure to generative AI, the technology run by ChatGPT that learns from analysing vast data sets to generate text, images and computer code.
Businesses are trying to use generative AI to speed up video editing, recruitment and even legal work.
Consultancy PwC sees AI-related productivity savings and investments generating $15.7 trillion worth of global economic output by 2030, almost equivalent to the gross domestic product of China.
The question for investors is whether to jump on the AI train now, or exercise caution, especially given mounting concern among regulators about the technology's potentially disruptive impact.
“There are clearly going to be winners in all this,” said Niall O'Sullivan, chief investment officer of multi-asset for EMEA, at Neuberger Berman.
“It's just that that’s very hard to be true for the entire market.”
Instead of backing hot start-ups or rushing into highly valued AI-themed businesses that might fail, seasoned investors are taking a lateral view to back already proven technology companies that might benefit from the longer-term trend.
“It's going to be as transformative as the internet, as the mobile internet, as the mainframe computer was,” said Alison Porter, a tech fund manager at Janus Henderson, whose funds have positions in Nvidia, with Microsoft as their largest holding.
However, Ms Porter also cautions that “we are still very early on the use cases for AI”.
She favours big tech groups like Microsoft and Alphabet because they have “strong balance sheets”, that make them “able to invest in many different technology advances”, including their recent focus on AI.
Dizzying valuations have made some investors wary of the technology hype cycle.
This concept, popularised by consultancy Gartner, starts with a trigger, such as the launch of ChatGPT, followed by inflated expectations and then disillusionment. Even if a technology moves to mass adoption, many early stage innovators can fail along the way.
“There's a question about where we are in that curve with AI, where the hype is so visible,” said Mark Hawtin, investment director at GAM Investments.
“There are ways to get exposure to the [AI] theme without picking something that is highly valued.”
Janus's Ms Porter recommended backing proven companies that may be “big beneficiaries in terms of providing infrastructure” for future trends in generative AI that, as of now, are unclear.
GAM's Mr Hawtin said he has also hunted out companies that provide the “picks and shovels” necessary for enabling new AI technology.
For example, AI systems require huge volumes of data to analyse and learn from, but only 1 per cent of global data is currently being captured, stored and used, according to Bank of America.
Mr Hawtin's funds hold Seagate Technology, which makes hard drives and data storage products, and chipmaker Marvell Technology for this reason, he said.
Jon Guinness, tech portfolio manager at Fidelity International, said management consultancy Accenture is in his portfolio because as businesses consider how to use AI, “I strongly think you call in the experts”.
Trevor Greetham, head of multi-asset at Royal London Investment Management, said he was “overweight” in dominant tech stocks in part because AI supported their valuations, but he cautioned against AI-themed stocks.
“There will be an awful lot of losing lottery tickets,” he said, recalling the dot-com crash of the early 2000s.
Also sticking with big tech, Fidelity's Mr Guinness said his funds hold Amazon partly because of its efforts to make AI less expensive for businesses.
Amazon's Bedrock service, for example, lets companies customise generative AI models rather than invest in developing them themselves.
“The big benefits of AI,” Janus's Ms Porter said, “are going to happen over the long term.”
“Investors want to invest in AI now and they expect things to happen now. But we would never blindly buy into AI and we don't do things at any price.”
CHATGPT%20ENTERPRISE%20FEATURES
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UAE currency: the story behind the money in your pockets
Federer's 19 grand slam titles
Australian Open (5 titles) - 2004 bt Marat Safin; 2006 bt Marcos Baghdatis; 2007 bt Fernando Gonzalez; 2010 bt Andy Murray; 2017 bt Rafael Nadal
French Open (1 title) - 2009 bt Robin Soderling
Wimbledon (8 titles) - 2003 bt Mark Philippoussis; 2004 bt Andy Roddick; 2005 bt Andy Roddick; 2006 bt Rafael Nadal; 2007 bt Rafael Nadal; 2009 bt Andy Roddick; 2012 bt Andy Murray; 2017 bt Marin Cilic
US Open (5 titles) - 2004 bt Lleyton Hewitt; 2005 bt Andre Agassi; 2006 bt Andy Roddick; 2007 bt Novak Djokovic; 2008 bt Andy Murray
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
Company%20profile
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The%20specs
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The%20Genius%20of%20Their%20Age
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Key recommendations
- Fewer criminals put behind bars and more to serve sentences in the community, with short sentences scrapped and many inmates released earlier.
- Greater use of curfews and exclusion zones to deliver tougher supervision than ever on criminals.
- Explore wider powers for judges to punish offenders by blocking them from attending football matches, banning them from driving or travelling abroad through an expansion of ‘ancillary orders’.
- More Intensive Supervision Courts to tackle the root causes of crime such as alcohol and drug abuse – forcing repeat offenders to take part in tough treatment programmes or face prison.
'Saand Ki Aankh'
Produced by: Reliance Entertainment with Chalk and Cheese Films
Director: Tushar Hiranandani
Cast: Taapsee Pannu, Bhumi Pednekar, Prakash Jha, Vineet Singh
Rating: 3.5/5 stars
Tips to keep your car cool
- Place a sun reflector in your windshield when not driving
- Park in shaded or covered areas
- Add tint to windows
- Wrap your car to change the exterior colour
- Pick light interiors - choose colours such as beige and cream for seats and dashboard furniture
- Avoid leather interiors as these absorb more heat
The currency conundrum
Russ Mould, investment director at online trading platform AJ Bell, says almost every major currency has challenges right now. “The US has a huge budget deficit, the euro faces political friction and poor growth, sterling is bogged down by Brexit, China’s renminbi is hit by debt fears while slowing Chinese growth is hurting commodity exporters like Australia and Canada.”
Most countries now actively want a weak currency to make their exports more competitive. “China seems happy to let the renminbi drift lower, the Swiss are still running quantitative easing at full tilt and central bankers everywhere are actively talking down their currencies or offering only limited support," says Mr Mould.
This is a race to the bottom, and everybody wants to be a winner.
EA Sports FC 26
Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
((Disclaimer))
The Liechtensteinische Landesbank AG (“Bank”) assumes no liability or guarantee for the accuracy, balance, or completeness of the information in this publication. The content may change at any time due to given circumstances, and the Liechtensteinische Landesbank AG is under no obligation to update information once it has been published. This publication is intended for information purposes only and does not constitute an offer, a recommendation or an invitation by, or on behalf of, Liechtensteinische Landesbank (DIFC Branch), Liechtensteinische Landesbank AG, or any of its group affiliates to make any investments or obtain services. This publication has not been reviewed, disapproved or approved by the United Arab Emirates (“UAE”) Central Bank, Dubai Financial Services Authority (“DFSA”) or any other relevant licensing authorities in the UAE. It may not be relied upon by or distributed to retail clients. Liechtensteinische Landesbank (DIFC Branch) is regulated by the DFSA and this advertorial is intended for Professional Clients (as defined by the DFSA) who have sufficient financial experience and understanding of financial markets, products or transactions and any associated risks.
UAE currency: the story behind the money in your pockets
NO OTHER LAND
Director: Basel Adra, Yuval Abraham, Rachel Szor, Hamdan Ballal
Stars: Basel Adra, Yuval Abraham
Rating: 3.5/5
ASSASSIN'S%20CREED%20MIRAGE
%3Cp%3E%0DDeveloper%3A%20Ubisoft%20Bordeaux%0D%3Cbr%3EPublisher%3A%20Ubisoft%0D%3Cbr%3EConsoles%3A%20PlayStation%204%26amp%3B5%2C%20PC%20and%20Xbox%20Series%20S%26amp%3BX%0D%3Cbr%3ERating%3A%203.5%2F5%3C%2Fp%3E%0A
MOUNTAINHEAD REVIEW
Starring: Ramy Youssef, Steve Carell, Jason Schwartzman
Director: Jesse Armstrong
Rating: 3.5/5
Some of Darwish's last words
"They see their tomorrows slipping out of their reach. And though it seems to them that everything outside this reality is heaven, yet they do not want to go to that heaven. They stay, because they are afflicted with hope." - Mahmoud Darwish, to attendees of the Palestine Festival of Literature, 2008
His life in brief: Born in a village near Galilee, he lived in exile for most of his life and started writing poetry after high school. He was arrested several times by Israel for what were deemed to be inciteful poems. Most of his work focused on the love and yearning for his homeland, and he was regarded the Palestinian poet of resistance. Over the course of his life, he published more than 30 poetry collections and books of prose, with his work translated into more than 20 languages. Many of his poems were set to music by Arab composers, most significantly Marcel Khalife. Darwish died on August 9, 2008 after undergoing heart surgery in the United States. He was later buried in Ramallah where a shrine was erected in his honour.
more from Janine di Giovanni
COMPANY PROFILE
Name: Kumulus Water
Started: 2021
Founders: Iheb Triki and Mohamed Ali Abid
Based: Tunisia
Sector: Water technology
Number of staff: 22
Investment raised: $4 million
THE%C2%A0SPECS
%3Cp%3EEngine%3A%204-cylinder%202.5-litre%20%2F%202-litre%20turbo%0D%3Cbr%3EPower%3A%20188hp%20%2F%20248hp%0D%3Cbr%3ETorque%3A%20244Nm%20%2F%20370Nm%0D%3Cbr%3ETransmission%3A%207-speed%20auto%0D%3Cbr%3EOn%20sale%3A%20now%0D%3Cbr%3EPrice%3A%20From%20Dh110%2C000%0D%3C%2Fp%3E%0A
The specs
Engine: 2.0-litre turbo 4-cyl
Transmission: eight-speed auto
Power: 190bhp
Torque: 300Nm
Price: Dh169,900
On sale: now
What sanctions would be reimposed?
Under ‘snapback’, measures imposed on Iran by the UN Security Council in six resolutions would be restored, including:
- An arms embargo
- A ban on uranium enrichment and reprocessing
- A ban on launches and other activities with ballistic missiles capable of delivering nuclear weapons, as well as ballistic missile technology transfer and technical assistance
- A targeted global asset freeze and travel ban on Iranian individuals and entities
- Authorisation for countries to inspect Iran Air Cargo and Islamic Republic of Iran Shipping Lines cargoes for banned goods
The Brutalist
Director: Brady Corbet
Stars: Adrien Brody, Felicity Jones, Guy Pearce, Joe Alwyn
Rating: 3.5/5
FIXTURES
Nov 04-05: v Western Australia XI, Perth
Nov 08-11: v Cricket Australia XI, Adelaide
Nov 15-18 v Cricket Australia XI, Townsville (d/n)
Nov 23-27: 1ST TEST v AUSTRALIA, Brisbane
Dec 02-06: 2ND TEST v AUSTRALIA, Adelaide (d/n)
Dec 09-10: v Cricket Australia XI, Perth
Dec 14-18: 3RD TEST v AUSTRALIA, Perth
Dec 26-30 4TH TEST v AUSTRALIA, Melbourne
Jan 04-08: 5TH TEST v AUSTRALIA, Sydney
Note: d/n = day/night
