The tech sector has demonstrated robust fundamentals, with artificial intelligence (AI) emerging as a potential game-changer. Consequently, for investing in AI, Fullerton Fund Management identifies key players embodying the extensive reach of AI’s progress. 

The asset manager says that investment opportunities span across hyper scalers, platforms, data clouds, and hardware. As per Fullerton, companies like Microsoft, Adobe, Snowflake, Nvidia, SK Hynix, and Dell Technologies are positioned to benefit from the AI revolution.

Besides, it suggests that the rapid adoption of generative AI has played a crucial role in driving the trend of investing in AI. “Aside from trends toward further AI adoption, what has likely fuelled investor sentiment the most is that large payoffs are already flowing for key players,” says Fullerton. 

The asset manager observes a substantial surge in share prices for companies most directly impacted by AI, particularly within sectors such as software, semiconductors, tech hardware, and media.

Additionally, Fullerton sees AI as a catalyst for increased productivity and economic growth. The asset manager cites PwC’s forecast according to which the potential impact of AI-related technologies, suggests a substantial boost to global GDP by $15.7 tn till 2030, led by increased productivity and spillover demand effects.

Also, Fullerton opines that despite concerns about a speculative bubble in the tech sector, there is limited evidence suggesting an overstretched market. According to it, the potential for AI to drive a structural break in the sector’s performance adds to the optimism. 

“However, while some jobs may become redundant with greater AI integration, employment opportunities will also be created from shifts in productivity, an expanded value-chain from AI, and greater consumer spending,” informs Fullerton. 

Furthermore, the asset manager says that AI will impact every corporate sector to varying degrees. “…(it will impact) the most immediate beneficiaries within ‘the brains of AI’ – software and hardware – before spreading out to other corporate adopters across consumerism, new industrialisation (including tech), healthcare, and fintech,” adds the asset manager. 

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