One day, in the elevator, you make a deal with your neighbor. You'll fix his crashed computer, and he'll give you a trillion euros in return. You, meanwhile, will pay him a trillion euros when he fixes your leaky sink. You haven't fixed anything yet, but you immediately call the press and television to announce that you both have amazing prospects for the future, because your order book has jumped by a trillion. If you're listed on the stock exchange, the market will immediately discount the news and send your stock soaring. It's with this hyperbole that Kairos strategist Alessandro Fugnoli describes in the latest episode of his podcast “On the 4th floor"what is happening to companies, and therefore to securities, linked to the world ofartificial intelligence, with the market reacting enthusiastically to the numerous announcements and deals being revealed day after day. "There's no need to worry too much," the economist reassures, "because in these cases, the market, after its initial enthusiasm, quickly sobers up and corrects its excesses."
Companies disappointed by artificial intelligence
What we need to reflect on when talking about artificial intelligence, according to Fugnoli, is something else: "the processor manufacturers, the creators of linguistic models and the suppliers of computing power they buy and sell among themselves more than they invoice externally. This leads us to ask ourselves how much the world really needs artificial intelligence and how capable it is of using it." A partial answer could come from a study by MIT (Massachusetts Institute of Technology) which notes that 95% of companies that started using it were disappointedThe reason? Many thought AI was a way to reduce staff (and therefore costs) and not a tool to accelerate innovation. "It turns out that the public isn't very happy when they call customer service and hear a virtual assistant instead of a human. Or that software programs written by artificial intelligence often contain errors and therefore need to be revised, resulting in a waste of time," explains the Kairos strategist.
It's difficult, as of today, to even calculate how many companies will be able to use (or want to use) the new, very promising AI models. And so some are starting to wonder... if artificial intelligence does not produce negative effects on economies and financial markets. "If successful, it is said, it will eliminate many jobs and force already strained public finances to shoulder heavy social safety net costs. If unsuccessful, however, the bags will deflate and will produce recessive impulses,” Fugnoli summarizes.
AI: Sell the Bubble or Buy the Future?
From the real economy to the markets. What to do? Are buyers investing in the future, or are they destined to lose everything when the bubble bursts? The advice the strategist gives investors in his podcast is to "maintain a balanced attitudeor, avoiding on the one hand skepticism and the exclusion of the sector from portfolios and, on the other, uncritical enthusiasm and the pursuit of speculative excesses”.
We must thereforeinclude without excess, favoring three directions. “The first is that of the large diversified companies which have large positive cash flows and can still afford massive investments. The second is that of small companies that occupy a niche not too crowded, such as artificial intelligence applied to humanoid robotics. The third is that of companies working for the military sector and for that of the surveillance and which therefore have the guarantee of a broad and stable public demand", says Fugnoli, according to whom another criterion to use would be to overweight the sector in those markets where its valuations are still moderate, as in China, or where listed companies in the sector are still few and therefore enjoy a rarity value, as in Europe.
“What is certain is that, especially in a phase in which retail and passive investment are so important, the sector will continue to exercise a decisive influence on the stock markets as a whole,” he concludes.
