AI – Current Goldrush in the Markets
In recent weeks AI has made headlines around the world. Lots of people are talking about OpenAI’s Chat GPT – the human like chatbot that is designed to simulate real conversations. But just what is the buzz about?
It is not only retail users who have recognized the value of this startup. Giants such as Microsoft are set to invest $10 billion in OpenAI, as part of a funding round that would value the company at an astonishing $29 billion. But let’s take a step back. What is AI and how we can profit from it in the stock markets?
AI stands for artificial intelligence. This is the simulation of human intelligence in machines which are programmed to think and learn. The field of AI research was founded on the belief that a machine can be made to think like a human, if the right methods are used. AI technology has advanced significantly in recent years. It is now being used in a wide range of applications, such as: image and speech recognition, natural language processing, decision-making, and problem-solving.
IBM is a noteworthy example of a pioneer in this industry, having heavily invested resources into AI technology. It is known for the Watson AI platform, with its solutions for industries such as healthcare and finance.
Another industry leader is Google AI, the machine learning powerhouse that will probably know you better than your own mother. Even Facebook utilizes AI, in areas such as image and video recognition, language understanding, and personalized recommendations.
Additionally, there are many startups in the AI space that are focused on specific industries or applications. One of my favourite ones is X.AI, an AI-powered scheduling assistant that helps you schedule meetings and appointments. It’s like having a personal assistant by your side 24/7.
The technology of these companies is undoubtedly breathtaking; but how can we invest?
The stock market is the place to be
Most of these companies are well-established with a strong track record of financial performance, making them an attractive option for investors in the stock market. NVIDIA is one that caught my attention. As well as having a presence in the gaming industry, NVIDIA has made a significant contribution to data centers and AI, where their GPUs (graphics processing units) are widely used in cloud-based AI services and high-performance computing.
Moreover, it has an interesting upcoming seasonal trend during February.
Seasonal Chart of NVIDIA over the past 10 years
Source: Seasonax, click on the link http://tiny.cc/Seasonax-NVIDIA to open an interactive seasonal chart
Keep in mind that a seasonal chart depicts the average price pattern of a stock in the course of a calendar year, calculated over several years (unlike a standard price chart that simply shows stock prices over a specific time period). The horizontal axis depicts the time of the year, while the vertical axis shows the level of the seasonal pattern (indexed to 100). The prices reflect end of day prices, and do not include daily price fluctuations.
Looking at the seasonal chart above, over the past 10 years February has been a favourable month for this company. In the short time span of 17 trading days (from January 28 until February 20), shares of this tech giant rose on average by almost 10%. Moreover, since 2013 the pattern returns had a winning strike of 90%. This means NVIDIA generated gains in 9 out of the 10 years during the selected time period.
Another promising company that is disrupting AI technology is ANSYS. It has developed a bunch of AI-powered solutions that are taking engineering simulation to the next level. The company’s strong financial performance is driven by their diverse portfolio of simulation software products, and their relentless focus on innovation. They’re constantly pushing the boundaries of what’s possible with simulation technology, giving them a competitive edge in the market.
From a market entry perspective, short-term investors who have invested their money during February in the last 10 years have had a competitive advantage compared to others. May onwards is also another interesting period to get onboard. For a detailed insight take a look at the interactive chart below.
Seasonal Chart of ANSYS over the past 10 years
Source: Seasonax, for further analysis click on the link http://tiny.cc/Seasonax-ANSYS
The AI industry is filled with companies that are like the superheroes of technology, each with their own unique powers and abilities, working towards a common goal: to shape the future with AI.
When choosing the “right” one, make use of Seasonax to identify best entry and exit points based on recurring patterns. By signing up for free to https://app.seasonax.com/signup, you will be able to scan for more than 25.000 instruments, including different sectors, stocks, (crypto)currencies, commodities, and indexes.
Remember, don’t just trade it, Seasonax it!
Special thanks to ChatGPT, for the invaluable contributions to this piece.
Co-Founder and Managing Partner of Seasonax
Tea Muratovic has worked in the financial industry for many years and has gained a strong financial background in the international market environment. Her strength lies in Capital Market Products & Asset Management. As the Founder of Seasonax (www.seasonax.com) and investment boutique Seasonax Capital (www.seasonax-capital.com) she has received several investment awards and been recognized by the industry experts for her achievements. Moreover, Muratovic is author of many articles that have been featured in industry relevant media (Institutional Money, Munich Stock Exchange, TalkMarkets, FundView, Bloomberg…).