How AI development is driving stock market growth
The rapid AI development is drawing investors’ attention to the sector. This, in turn, is pushing up the share prices of technology companies. As a result, the stock market has an optimistic mood, which could lead to a correction.
The proliferation of artificial intelligence technologies has changed the balance of power in the financial world. Companies linked in one way or another to the AI trend have emerged as leaders. For example, since the beginning of 2024, Nvidia’s share price has risen by 77%. Experts are revising their recommendations in light of current trends. Financial analyst Mark Rogers has highlighted several promising companies. In his opinion, the winners will be companies involved in AI. At the same time, they do not necessarily have to be in the technology sector. For example, if a company integrates innovation into its processes, this is also worth attention.
However, it is essential to recognise that market sentiment can change quickly. This means that you need to consider several areas for investment.
Review promising stocks
Mark Rogers has highlighted companies that will be attractive to investors. He has also considered the risk of a market correction when selecting companies. Among them, Rolls-Royce stands out:
– the carmaker’s shares have risen 148% in a year and show no sign of falling;
– the company is also benefiting from the development of artificial intelligence. It uses AI-based solutions to test engine performance;
– the company is on track to achieve a free cash flow £3 billion.
Rolls-Royce currently has a market capitalisation of £32bn. If it misses the target, its shares could fall in value.
Advanced Micro Devices is also worth mentioning. Its shares have risen 49% over the past 12 months. Meta Platforms has performed well with a 44% increase. Despite the difficulties, the company holds stable positions.
In addition to AI, the energy sector is interesting from an investment point of view. There are two reasons for this:
– the refusal to supply raw materials from sanctioned countries;
– the desire to meet climate change targets.
Reducing the use of fossil fuels stimulates the development of the sector. And that, in turn, positively impacts companies’ revenues. We are also talking about suppliers of environmentally friendly energy from renewable sources. We should also take into account the electric transport sector. Many countries are introducing various incentives to promote zero-emission vehicles.
Despite the promise of AI and the energy sector, it is important to consider global and individual risks. In addition, other areas should not be overlooked. In the short term, they can deliver excellent results.
