Investors are excited about the potential of artificial intelligence (AI), as evidenced by the surging stocks of companies like chipmaker Nvidia. Wealth managers confirm that there is money to be made in AI, but warn that there are risks associated with it. Nvidia has surged in value this year thanks to its market position as it is one of the few companies building the chips capable of powering AI applications that are increasingly dominating headlines. Other big tech names such as Alphabet and Microsoft are also seeing boosts as they talk up their own AI plans and look to compete with OpenAI. However, if excitement around an industry rises too quickly and reality hampers growth expectations, the trend may turn out to have been a bubble which sends stocks crashing back down if it pops. Concerns that AI could pose an existential threat to society also pose a risk to the growth of AI stocks.
Nvidia is a California-based semiconductor company specialising in the manufacturing of graphics processing units (GPUs).
Allan Small is a senior investment advisor who runs his own firm with iA Private Wealth, while Derek Dedman is vice-president and portfolio manager with WDS Investment Management.
