Financial Markets: Investors shift focus to artificial intelligence

In recent weeks, financial markets have experienced a physiological slowdown following the slow but steady gains from the earlier part of the year. Major stock benchmarks have seen profit-taking, returning prices to levels from a few months ago. Analysts suggest that such corrections are quite common during the summer season. With the contraction in trading volumes across various assets, it's easier for sizable orders to trigger directional movements, both upwards and downwards. Even though the technical structures of the equity market currently show no signs of weakening, both retail and institutional investors are looking for a theme that can rejuvenate the indices, especially when some macro data is beginning to show a global economic slowdown.

Artificial intelligence takes center stage in the stock market

With further steps towards disinflation in advanced countries, it's very likely that Central Banks will become less aggressive on interest rates, benefiting international stock markets. However, investors are actually looking to listed companies to provide the support that allows them to invest with confidence.

On mercati24.com, one of the most authoritative financial information hubs in Italy, an insightful analysis was published, aiming to identify potential drivers for international stock markets in the coming months. According to the experts on the online portal, the theme gaining the most traction as a driver for the equity market is Artificial Intelligence. This technology has been at the center of economic and financial discussions due to the significant changes its widespread use will bring to society. Many industry professionals believe this process is irreversible, hence the keen interest in companies closely tied to the AI sector.

Nvidia surprises the markets once again

Nvidia, among the Big Tech listed on Wall Street, is certainly the company that, although not directly linked to the development of Artificial Intelligence, could greatly benefit from its use. It's no coincidence that the data released during the earnings season for the second quarter of the year significantly exceeded estimates, as was the case in the previous quarter. The company reported revenues of $13.51 billion against analysts' expectations of $11.13 billion, while earnings per share stood at $2.7 compared to a consensus of $2.07.

The figures that excited investors actually hide the huge growth potential for the company. According to a Goldman Sachs report, AI could boost the productivity of many companies, and Nvidia is certainly among the most prepared in this regard. A significant portion of the company's wage costs could potentially be absorbed by the use of this technology, and considering that this expense accounts for 14% of revenue, it's easy to understand the boost the company would receive in terms of balance sheet expansion.

Financial Markets: High Anticipation for Arm Holdings' IPO

As experts from mercati24 point out, the semiconductor sector is fertile ground for Artificial Intelligence and its everyday applications. That's why they believe it's crucial to closely follow the upcoming IPO of Arm Holdings.

The company, owned by Softbank, is finalizing preparations for its Wall Street debut under the supervision of advisors Barclays, Goldman Sachs, JPMorgan Chase, and Mizuho Financial Group Inc. Insiders believe the public offering of this microprocessor manufacturer could be the largest in the U.S. in recent years, aiming for a valuation between $60 and $70 billion after the roadshow. The massive liquidity expected to flood the U.S. stock market could trigger a positive domino effect on other stocks.

How to invest in the Artificial Intelligence theme

Within a well-balanced portfolio diversification, it would be wise to allocate a portion of resources to the Artificial Intelligence theme, targeting long-term horizons. While stock picking for a retailer is quite complex, especially in a relatively young market niche like this, there are already numerous financial instruments available that allow for investment in the sector with good diversification.

On the mercati24 portal, there's an interesting tutorial evaluating the features of some funds with sectoral benchmarks focusing on this technology. Moreover, cost-conscious savers can rely on analyses of alternative investment vehicles available over the counter. Many online brokers, recognizing the potential of Artificial Intelligence, have started to include in their product catalog financial instruments - smart portfolios, ETFs - that hold stocks related to the sector. The interesting aspect of this approach to the reference markets is the conditions applied to users: in fact, accounts that can be subscribed to through intermediaries active on decentralized exchanges do not require any opening or management fees and can be activated with small initial capitals.

(Devdiscourse's journalists were not involved in the production of this article. The facts and opinions appearing in the article do not reflect the views of Devdiscourse and Devdiscourse does not claim any responsibility for the same.)