High Tech 2nd half uncertain stocks, long-term gains – 07/24/2023 – Market

After the Nasdaq technology stock exchange, in the United States, recorded an increase of more than 30% in the first half, the highest in the last 40 years, analysts say it is difficult to predict that the movement will continue at the same rate during the second half of the year.

From January to June, the upward movement was largely driven by news related to artificial intelligence, which had the GPT chat as a highlight. An adjustment after the drop in stocks in 2022 caused by inflationary pressure and high interest rates is also pointed out by specialists among the reasons for the good performance of the stock index.

Among the main stocks traded on US stock exchanges, those of Microsoft, which invested in OpenAI, the company behind chatGPT, rose 42% in the first half, while Google’s rose 36%, according to Bloomberg data.

There are cases of even more outstanding increases, such as Meta shares, which jumped 140% in the period, and Tesla, which gained 112%.

“Recent advances in artificial intelligence have opened an avenue of growth for technology companies that has made the market more optimistic about future profits, but it is not necessarily something that will materialize in the next quarter”, says Arthur Siqueira, partner and analyst at the manager focused on global investments Geo Capital.

He recalls that the attention of investors has turned in recent days to the beginning of the earnings season for the second quarter of companies with shares traded in the United States.

The numbers, in the analyst’s assessment, should reflect much more recent events such as waves of mass layoffs in technology companies, with potential gains in efficiency, than the advances that artificial intelligence can still bring to business in the future.

Among the balance sheets already released, Netflix and Tesla saw shares register a sharp drop the day after the presentation of results, with revenues below market expectations.

According to Siqueira, of what is already known about artificial intelligence so far, perhaps a good part of it is already reflected in stock prices today.

When considering a medium and long-term horizon, however, the analyst states that it is even difficult to measure the impact that artificial intelligence can still add to the businesses of these companies, and, consequently, to the share price.

Head of analysis at the manager Nextep Investimentos, Maria Antonia Viuge says that, when new technologies with disruptive potential start to emerge, the attention of financial agents often turns to a particular initiative that ends up having a greater appeal with the general public, but that does not necessarily represent the entire dimension of the business.

She cites blockchain and cryptocurrencies as an example. Bitcoin and other crypto assets are much more talked about on a daily basis among investors, but, in reality, it is the blockchain network that has a much greater disruptive potential to transform corporate business in relation to the current model, says the expert.

“People end up focusing on the tree and don’t see the forest. Artificial intelligence is much more than just the GPT chat, it is something that has the potential to permeate many other lines of business”, says Maria Antonia.

The specialist says that Microsoft and Google are among the main positions in the portfolios of funds dedicated to Nextep’s global shares. She claims that the investments are based on the fact that they are well-established companies in their niches, regardless of the impact that artificial intelligence will still bring to operations, “although both are well positioned to benefit” from the new technology.

Siqueira, from Geo, who also has Google and Microsoft among the greatest convictions in the funds’ portfolio, points out that there are cases of companies that have already managed to add artificial intelligence to their operations, such as Microsoft itself and Meta.

The former recently announced a $30 subscription fee for corporate customers to access the Microsoft 365 artificial intelligence tool called Copiloto. The system promises to compose emails in Outlook and write documents in Word, among other features.

Meta has just launched a commercial version of its artificial intelligence model called Llama, offering a free alternative to the models sold by OpenAI and Google. The product will be distributed by Microsoft and run on the Windows operating system.

“It’s hard to say what will be the movement of the markets in the short term, like in the next 6 months. But in a scenario of 3 to 5 years, for sure [a alta das ações] should continue. In the long run, the future has to go through technology”, says Leonardo Otero, founding partner of the manager dedicated to global equities Arbor Capital.

Microsoft, Meta, Amazon and Google make up Arbor’s portfolio of funds, along with names like Visa, Oracle, Booking.com and chip maker TSMC.

With an appreciation of 32% in the first half, the Arbor fund has just gained a version for the general public – until then, only investors classified by market legislation as qualified had access to the product, which are those with at least R$ 1 million in investments. The manager’s expectation is to raise around R$ 250 million with the new fund, practically doubling the volume of resources under management.