When the curtain falls on 2024 in less than two weeks, it will likely mark another great year for Wall Street. Iconography Dow Jones Industrial Averagestandard Standard & Poor’s 500supported by growth Nasdaq Composite Each of them has climbed to multiple record closing levels this year.
Although a combination of factors has lifted Wall Street’s major indexes into uncharted territory, including better-than-expected corporate earnings and stock split euphoria, Donald Trump wins in NovemberThere is nothing that makes a bigger fuss than… Artificial Intelligence (AI) revolution.
The long-term steerable AI market is practically limitless. AI-powered programs and systems can become more efficient at their assigned tasks, and can evolve and “learn” without human intervention. That’s why analysts at PricewaterhouseCoopers estimate that AI will add $15.7 trillion to the global economy by the end of the decade.
In response to this generational opportunity, shares of blue-chip AI companies have soared — and for good reason.
Nvidia (Nasdaq: NVDA) Gaining nearly $2.9 trillion in market cap since the start of 2023, the company’s graphics processing units (GPUs) have become the undisputed top choice in AI-accelerated data centers. Last week he specialized in artificial intelligence network solutions Broadcom It became the 11th publicly traded company in the world to reach $1 trillion in nominal value. Meanwhile, he specializes in AI-based data mining Palantir Technologies (NASDAQ:PLTR) He achieves gains of 1000% during the period of two consecutive years.
These represent just some of the notable technology stocks on Wall Street that have soared on hopes that demand for AI hardware and software will change the corporate landscape.
But while Nvidia and Broadcom’s growth forecasts have knocked even the highest analyst forecasts out of the park, there are reasons to believe the AI bubble will burst in the new year.
Among the catalysts that could halt the near-parabolic rise of AI stocks like Nvidia and Palantir, none stands out more than history. Although history is not a timing tool, it has a strong track record of predicting eventual downsides at market-leading companies regarding the next big innovations.
Nearly 30 years ago, the Internet went mainstream and positively changed the path of business growth forever. However, businesses did not fully understand the benefit of the Internet for many years, which is why we witnessed the dot-com bubble taking shape.
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