CES: This week’s gargantuan annual Las Vegas consumer electronics trade show (CES) is a showcase for the accelerated adoption of artificial intelligence (AI). This is helping drive an idiosyncratic earnings recovery cycle, despite a slowing economy. And keeping the tech sector supported, even as performance leadership broadens to cheaper and more cyclical areas. S&P 500 companies are actively discussing (see chart) AI. This is led by tech and communications stocks, with 70% talking about. But widening to real estate, consumer, financials, and industrials, with nearly a third mentioning. Also, 35% of global retail investors plan to own AI stocks, more than the 26% who already do, and versus the 30% who say they have no interest..
TRENDS: AI is now coming to consumer’s living rooms. From Samsung’s (SMSN.L) AI-enabled vacuum bot to LG Electronics AI TV. Whilst Dell (DELL) and others have AI-PC’s, and Microsoft (MSFT) its first new (AI) keyboard button in three decades. Whilst both NVIDIA (NVDA) and AMD (AMD) respectively launched a new GPU series and graphics card. It remains to be seen how much consumers respond to this, but it’s emblematic of the continued broadening of AI from hype to reality. 4,000 companies are presenting with 130,000 attendees. It’s livestreamed.
TECH: We see a broadening of stock market performance in 2024, and rotation toward the more soft-landing and interest rate cut sensitive segments that lagged last year. The tech sector may take more of a backseat but will still do fine. Lower interest rates will support the already high valuations. Whilst already double-digit earnings growth prospects are underpinned by this broadening of AI adoption and use-cases. Whilst more retail investors plan to own AI stocks than do today (see chart), per our most retail investor survey of 10,000 investors in 13 countries.
All data, figures & charts are valid as of 10/01/2024.