Alphaville has already highlighted how much AI mania has contributed to the US equity market’s 2023 gains. SocGen is now arguing that even those estimates underplay the impact.
The French bank’s analysts find that without the gains of stocks that are possible AI winners, the S&P 500 would now be down 2 per cent this year, rather than up 8 per cent.
It’s not immediately clear from the note how SocGen classifies “AI Boom stocks”, but we’re guessing it includes the likes of Nvidia, Microsoft, SalesForce, and Alphabet. Here’s SocGen’s Manish Kabra, with our emphasis:
The AI boom and hype is strong. So strong that without the AI-popular stocks, S&P 500 would be down 2% this year. Not +8%.
Our update on the AI sentiment news indicator keeps rising exponentially and more extended than when we first talked about few weeks ago.
While AI as a theme has been with us for a while and we suggested being long SG Robotics and AI Equity as a secular theme last year, it is tough to fight against a very strong hype on a very short-term.
We don’t want to seem like Luddites, but . . .
— This awfully fragile narrow no-good rally
— The ChatGPT market shock