Zhitong Financial App learned that the latest report released by research institute Vanda Research shows that the investment frenzy around artificial intelligence (AI hype) seems to be intensifying, and the boom has begun to attract retail investors, and retail investors who have been silent for a long time have finally re-chased hot spots in the US stock market. Retail investors have helped drive an average of $1.36 billion a day into U.S. equities, the research firm said. "The uptrend in retail buying is likely to continue in the coming weeks, which in turn could support U.S. equities higher across the board." Vanda Research said.
DataTrek Research, a well-known market research firm, pointed out in a report in May that the hype over artificial intelligence has not yet formed a "stock market bubble", and with the further influx of retail investors, AI-led technology stocks and broader technology stocks have more room to rise. DataTrek Research noted at the time: "Market interest in tech stocks is nowhere near where it was during the speculative tech bubble of the Covid era." According to the agency, this means that institutional investors may have been driving the recent rally in AI-related tech stocks, which means that there is still a lot of upside potential for AI tech stocks and broader tech stocks if retail investors become more involved in the space.
Tony Pasquariello, head of Goldman Sachs hedge fund, wrote in a note: "AI takes off like a rocket, attracting a wide variety of investors — and it's a simple subject that retail investors can easily understand." ”
Vanda Research's report comes as the S&P 500, the benchmark U.S. stock index, officially entered a "technical bull market" on Thursday. By the end of the day, the S&P 500 was up 26.41 points, or 0.62%, at 4,293.93, a 20% rebound from its October 2022 low — a bull market threshold in general.
Global investors are interested in Nvidia (NVDA. Frenetic bullish sentiment in artificial intelligence (AI) stocks such as US), combined with last week's final resolution of the U.S. debt ceiling issue, have pushed retail investors back into U.S. equities. In addition, more upbeat economic data from the US also contributed to the bullish outlook for US stocks, especially technology stocks, and the US jobs report for May showed that the US economy remains resilient despite rising interest rates.
A report released Thursday by Vanda Research highlighted that retail investors have helped drive an average of $1.36 billion a day into the stock market over the past week. "Retail investors in U.S. stocks are officially back in the market after a three-month hiatus," said Giacomo Pierantoni, an analyst at Vanda.
The return of retail investors can also be seen in important sentiment indicators, which have become more optimistic over the past week.
The CNN Fear and Greed Index has been hovering in "greedy" territory over the past week and jumped to "extreme greed" territory on Thursday, while AAII's weekly investor confidence survey showed that the index reached its highest level in nearly two years before the stock market officially peaked.
Vanda Research said hot deals for retail investors in recent weeks include buying Apple (AAPL. US), Microsoft (MSFT. US) and other large-cap technology stocks, exiting regional bank stocks in the United States after a week-long rally, as well as buying some small-cap stocks.
According to the Vanda Research report, AI tech stocks such as Nvidia are also expected to face continued buying pressure from retail investors in the coming weeks, and AI tech stocks still have room to rise as buying activity from retail investors has not yet reached worrying levels.
Giacomo Pierantoni, an analyst at Vanda, said: "Another sign is that equities are not seeing worrying inflows into retail investment, with one-month inflows into AI-type tech companies just above levels typically associated with 'low' retail inflows over the past year."
Vanda Research's report shows that despite widespread investor concerns about an imminent recession and more pessimistic investors believing there is a bubble in U.S. stock valuations, the eventual return of retail investors to stocks should help push U.S. technology stocks higher.
"Despite warnings of a stock market bubble from bears, we are still seeing relatively dovish market dynamics, which leads us to believe that the uptrend in retail buying forces could continue in the coming weeks, supporting U.S. equities higher across the country," Giacomo Pierantoni said.
Citi becomes the "standard-bearer of the bull market in technology stocks": U.S. technology stocks can still rise under the shouting AI frenzy
The optimistic forecasts of U.S. technology stocks by institutions such as Vanda Research coincide with those of Wall Street giant Citi.
Quantitative investment strategists from Citigroup said that the rally in U.S. technology stocks, which has risen sharply this year, will continue, mainly because the market investment frenzy around artificial intelligence and investors' expectations that the Federal Reserve will pause interest rate hikes are heating up, which have given a huge boost to U.S. technology stocks. Citi's team of quantitative strategists, led by Chris Montagu, said: "If investor sentiment improves further, growth stocks represented by technology stocks may rebound further."
Dirk Willer, strategist in Citigroup's global asset allocation team, and others said in a May 26 note that U.S. stocks are being boosted by feverish investment sentiment betting on artificial intelligence because of the high weighting of tech giants in the S&P 500, the benchmark U.S. stock market, and high investor allocation. Once the Fed ends its tightening cycle, the investment theme of artificial intelligence (AI) will help U.S. technology stocks, as well as the U.S. stock market as a whole, outperform stocks in other countries and regions.
Dirk Willer's team of strategists upgraded the overall rating of U.S. stocks to "neutral" and the broad rating of U.S. technology stocks to "overweight", mainly due to the investment frenzy around artificial intelligence technology will further boost U.S. stocks, and the expected end of the Fed's interest rate hike cycle, and the US economic growth rate is more resilient compared to Europe and other places.
Citi strategists such as Dirk Willer said: "While the price action of AI-related stocks is clearly extreme, especially when the actual use cases for monetization are still futuristic and the barrier to entry is not too high, we still believe it is too early to abandon this bull trend until AI develops enough to disappoint."
The generative AI market is extremely vast, and technology stocks such as NVIDIA are expected to get out of the "long bull" market
Although the investment frenzy around artificial intelligence (AI hype) has driven the stock prices of companies such as NVIDIA to success, this wave of US technology stocks dominated by the "generative AI revolution" may come out of the amazing "long bull market". Goldman Sachs predicted in a research report that in addition to chip giant Nvidia, Google's parent company Alphabet (GOOGL. US), Facebook parent company Meta (META. US), Microsoft, and Amazon (AMZN. Big tech companies like US) can be the ultimate winners in AI, just as they have become the dominant players in revolutionary tech fields like the internet and cloud computing.
With the advent of consumer-centric generative artificial intelligence (AI) tools such as ChatGPT and Google's Bard, it could drive a decade-long AI boom. According to a new report released by Bloomberg industry research analysts led by Mandeep Singh, the total revenue of the generative artificial intelligence market is expected to grow from $40 billion last year to $1.3 trillion by 2032, which is expected to increase 32 times in 10 years, with a compound growth rate of up to 42%.
Ed Yardeni, founder of Yardeni Research, a well-known majority of Wall Street and a market research firm, recently released a report that the strong rise of generative AI products such as ChatGPT may bring a new "Roaring 20s" to the global stock market, and consolidate the recent global stock market rally trend, while leading a new round of bull market.
Paul Tudor Jones, a world-renowned billionaire investor, recently said in an interview with the media that AI technology will drive a productivity boom, just as "technological revolutions" such as personal computers and the Internet did in the 80s and 90s of the 20th century, respectively. "I do think that the introduction of large language models and artificial intelligence will create a productivity boom that we've only seen a few times in the last 75 years," Jones said. He added that global equities could eventually achieve an average annualized increase of 15 percent.
Stan Druckenmiller, the billionaire founder of the Duquesne family office, said Wednesday that he plans to hold Nvidia for years, not months, as the company benefits from artificial intelligence (AI). "If Nvidia were really as big as I thought, we would hold it for at least 2 to 3 years, or even longer, instead of 10 months," he said. Druckenmiller also reiterated his view last month that Nvidia may not even slide in a potential recession.
In addition, exciting good news about AI continues to come, the first NVIDIA released an artificial intelligence supercomputer platform called DGX GH200, and then there is another big chip giant, as NVIDIA's competitor AMD (AMD. US) plans to hold a blockbuster event called "AMD Data Center and AI Technology Premiere" on June 13, 2023. AMD seems to hope to follow in the footsteps of NVIDIA by accelerating the company's AI business and capturing more market share in the booming AI field.
The world-renowned software services giant Adobe (ADBE. US) launched Sensei GenAI, a generative artificial intelligence (generative AI) tool for enterprises based on Adobe Experience Cloud applications. The tech company added that the new product, powered by Adobe Sensei GenAI, will integrate customer journey analytics, experience manager, journey optimizer, and Marketo Engage for enterprise businesses to improve productivity and personalize the customer experience.