A powerful CEO said artificial intelligence is shifting global financial markets and will do so for the long haul.
Artificial intelligence is already casting a long shadow over the global business sector, so it’s no shock that technology is having a major impact on the world’s financial markets, which regularly bet on the performance of those global businesses.
Unquestionably, AI is a transformative technology tool for global economies, and historically so.
“AI is transforming the global economy as surely as electricity and the steam engine did in their own times,” says Chris Hyzy, Chief Investment Officer for Merrill and Bank of America Private Bank. “As the technology improves, its primary benefits will include higher productivity, as companies increasingly turn to GAI for content creation, software development, marketing and sales, and customer service.”
Global revenue associated with AI software, hardware, service, and sales is growing at a 19% annual clip, BOA reported, reaching $900 billion by 2026, compared with $318 billion in 2020. Overall, AI will contribute more than $15 trillion to the global economy by 2030. “Funding for AI development is pouring in from corporate and individual investors and governments,” the investing banking giant added.
A Rising Tide Lifts Market Boats
All that investment flows into worldwide stock markets, which also invest heavily in AI to keep up.
“AI will power the stock market for the next decade,” said former Cisco CEO and current JC2 Ventures head John Chambers in a May 22 interview with CNBC. “I think the overall question is if you are an investor and invest in a portfolio of AI stocks, and if you did it consistently over the next five to 10 years, you’ll do very well.”
AI is a huge reason the stock market has moved so dramatically in the last 12 months, Chambers said. “The European stocks and FTSE were slower to move, but they’ve been positive for the last six months,” he noted. “Al will be like the internet, except three to five times more powerful. It will change your life in every way.”
Chambers also says the prominent market players are diving headfirst into AI, with 38% of US venture funding firms taking big positions in artificial intelligence stocks. That figure will rise to 50% by the end of 2024, he added.
Other executives say the earlier companies start using AI, the earlier they’ll start benefiting. That’s a move that will boost their profit margins massively, said Maurice Lévy, chairman of Publicis.
Lévy told CBNC an AI “transformation” is here and it’s having a big impact on company financials, even as they have to cut jobs to better compete.
“We don’t expect to see a net negative (in jobs), we expect a net positive,” Lévy said. “And the companies that will adopt AI, the earlier they will do it, the more they will grow, and the more they will create jobs with really some great added value.”
AI stocks have been outperforming recently. Since January 2023, AI-connected stocks have generated 30% higher returns than U.S. and global stock market indexes.
Brian O’Connell, a former Wall Street bond trader and best-selling author, is a prominent figure in the finance industry. With a substantial background as an ex-Wall Street trader, he has authored two best-selling books: ‘The 401k Millionaire’ and ‘CNBC’s Creating Wealth’, demonstrating his profound knowledge of finance and investing.
Brian is also a finance and business writer for esteemed national platforms and publications, including CNN, TheStreet.com, CBS News, The Wall Street Journal, U.S. News & World Report, Forbes, and Fox News.
