Artificial intelligence has been a big driver in the stock market, with Nvidia (NVDA) leading the way. Belpointe Chief Strategist David Nelson thinks that some of the other beneficiaries will be “the hundreds of companies that will actually use the technology,” such as Deere & Company (DE). Nelson believes AI will “revolutionize the industrial complex” and that it will be “probably bigger” than electricity, noting companies that are using AI enhance both their top and bottom lines.
Video Transcript
BRAD SMITH: Isn’t the issue then the refreshment rate or the replacement rate or replenishment rate of some of these AI chips, where so much demand has been pulled forward or at least going in NVIDIA’s direction. What we still don’t know is that replacement cycle for some of these AI chips and the cloud services as well.
DAVID NELSON: It’s an important point. And the company is profitable as NVIDIA invites competition. You can bet that every venture capital firm out there, every company that manufactures silicon is trying to catch up to NVIDIA. And at some point, they’ll do it. But right now, the game is theirs to lose. Certainly important stock for us, we’re not selling any.
SEANA SMITH: David, when it comes to some of the other names that could benefit out of this. We talk a lot about AMD. We talk a lot about Intel. When it comes to that second place position right now, who do you think stands to have the most to benefit?
DAVID NELSON: I’m not even looking to technology for the second place position I think the biggest beneficiaries are some of the companies, the hundreds of companies that are going to actually use the technology. I think it’s going to revolutionize the industrial complex. Marc Andreessen said it was as big as electricity. It’s probably bigger than that.
I look at companies like John Deere that’s already using the technology. A company like General Motors is already using the technology. All of these companies are enhancing their top and bottom line. So we’re all going to benefit from it.
BRAD SMITH: And so of the companies that are going to be the beneficiaries, I mean, we’ve got kind of three core pillars that investors have really been looking across– it’s the applications, it’s the models, and then it’s additionally the chips here. So is there one kind of pillar within generative AI that you believe has the longest runway or at least the most margins to gain as a result of this?
DAVID NELSON: That’s a tough one. I think all of those things that you just mentioned are really important. We’re certainly using at Belpointe large language models right here. It’s done wonders for me on the research side to condense information flow that we get. I think companies like ours.
I think a lot of companies are going to start to use that in their own intranet so that they can answer a lot of questions for the people that work for the company, rather than having support staff to do that.
So AI is going to eliminate a lot of jobs. And in a country right now where we’re starving for employees. It’s probably a good thing.
SEANA SMITH: So, David, what does this mean then for the broader market and what we could see in terms of moves over the next couple of months?
DAVID NELSON: In the next couple of months, probably the biggest risk we face are China and the Fed in that order. China simply because it’s the second largest economy on the planet, and it is slowing. And that kind of slows down global growth. The Fed for some obvious reasons. The Fed think the Fed is likely to push too far if they haven’t already. All they need to do is just maintain the status quo.
I think what we got wrong was last year with all those hikes that they were doing, it took all the way until March of this year just to hit neutral. And what happened in March of this year, suddenly banks started rolling over. Signature went under. Silicon Valley went under.
A couple of months later, companies like retailers like Macy’s are telling us– telling us that credit card delinquencies are rising. I think the Fed needs to stand pat. And frankly, if they don’t start cutting very soon, we’re going to have a recession sometime by mid next year.
https://finance.yahoo.com/video/ai-probably-bigger-electricity-strategist-140147967.html
