Should we invest in artificial intelligence during the second half of 2023?

No one could have predicted the rally that took place in the first half of 2023 for technology stocks, supported by the growing momentum in the artificial intelligence sector. The Nasdaq Composite Index rose by 31.7%, marking its best semi-annual performance since 1983.

Shares of “Nvidia” electronic chips and “Meta” rose by 190% and 139%, respectively. While shares of “Microsoft” and “Alphabet” rose by 35% each.

And the market value of Apple, which recently revealed its mixed reality headset, topped $3 trillion on Friday.

Despite this growing momentum, there are those who did not enter this market and thus missed this rally and are now confused.

In this context, Jean Zelaghy, an expert in “Toggle AI”, told CNBC that the artificial intelligence sector is still in a very early stage. The sector is expected to be very volatile in the future.”

Bet on Nvidi

“Nvidia” made headlines on Wall Street this year, as the chip company made many deals and projects in artificial intelligence, especially with regard to the Large Language Model, so that the company’s stock achieved the largest gains throughout the year so far and entered the trillion club. dollar.

No matter how AI develops, many investors have seen Nvidia as the biggest beneficiary. Shares rose 24% on a trading day in May, as the company offered an optimistic outlook on the company’s growth supported by surging demand for artificial intelligence chips.

In this context, the markets price a price target that is 8% higher than the closing levels of the last session of the first half of 2023, to add these increases to the gains of 190% in the first six months of the year.

“We expect positive gains in the second half,” said Silvia Jablonski, CEO of Defiance ETFs. “There’s a reason to continue to be in these companies, getting more out of stock than you can make in cash, but I don’t think Nvidia stock could go up again.” 100%.”

On the other hand, the portfolio manager in “Independent Solutions Wealth Management” Paul Mix believes that every portfolio manager specializing in technology should be exposed to “Nvidia” shares.

According to Mix, an investor who wants to find a cheaper way to get exposed to the artificial intelligence sector should consider investing in Advanced Micro Devices, as its shares rose by 76% in the first half.

As for the head of “Mahoney Asset Management,” Ken Mahoney, in turn, he says, “For those who are cautious about “Nvidia” stock, “Microsoft” stock is a safer way to invest in the artificial intelligence sector, given the company’s exposure in many technology sectors, including the industry. Cloud and software.

Shares of Microsoft, which supports Open IE and also has the ChatGPT platform, rose 42% in the six months of the year.

Are there investment opportunities outside the technology sector?

While the technology sector recorded the best investment performance so far in 2023 due to the growing momentum on artificial intelligence, some investors consider that the investment opportunities in the second half of the year are not in the technology sector.

In this context, Jordan Stewart, portfolio manager at Federated Hermes, expects biotechnology and healthcare stocks to benefit from artificial intelligence as well, which enables drug developers to reduce research and development costs and potentially bring drugs to market more quickly.

It can also help doctors with treatment plans. He believes AI will play a positive role in the weight-loss drug market, which is dominated by companies such as Eli Lilly’s Mongaro and Novo Nordisk’s Ozambique, where new technology will help personalize doses and monitor patient responses.

While Stewart declined to offer specific stocks to invest in, there are several pharmaceutical companies that are already using AI today. Insilico Medicine, a Hong Kong-based biotechnology company, this week began human clinical trials of a drug that uses artificial intelligence for target identification and design.

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