- Investors have invested a lot of money in technology stocks as a result of the development of AI.
- Due to the demand for powerful processing chips for use in cryptocurrency mining, Nvidia passed the $1 trillion mark.
- AI cryptocurrencies now have a $4.27 billion market cap.
The advancement of artificial intelligence has led investors to pour a large amount of money into technology stocks, according to Bank of America (BofA). They said, “The frenzy over artificial intelligence-linked stocks has gone too far but won’t die down just yet.”
Investors are acquiring shares in technology companies such as Nvidia, which recently rose to a $1 trillion net-worth company.
NVIDIA is known for developing integrated circuits, which are used in everything from electronic game consoles to personal computers (PCs). The company is a leading manufacturer of high-end graphics processing units (GPUs).
Eventually, its value increased with the growth of cryptocurrencies and AI due to Nvidia’s superior processing power in its chips and machine learning capabilities.
After observing the rise of OpenAI’s ChatGPT and DALLE, an AI chatbot and an image generator tool based on written prompts, investors are investing money in startups working on generative AI. According to Michael Hartnett, strategist at BofA, a “baby bubble” in AI was the dominant market theme in May, with tech funds attracting an all-time high of $8.5 billion in the week of May 31, 2023.
Bloomberg reports that while some people believe AI could soon increase productivity and profit margins across a range of industries, others believe the tech rally is being propelled by a fear of being replaced.
According to a JP Morgan study conducted in January 2023, 53% of traders said they thought artificial intelligence technology would have the greatest impact on how trading will develop during the next three years. Yet, Hartnett added that he remains bearish on stocks overall amid the prospect of tightening financial conditions. Harnett previously correctly predicted the 2022 stock slump.
AI crypto stocks have spiked, as reported in Forbes. Although only accounting for 0.4% of the crypto market, AI cryptos have reached a market cap of $4.27 billion. Juan Leon, a crypto researcher at Bitwise Investments, believes that crypto markets are often fueled by current trends. They run the risk of becoming “just another fad” in an industry that has been fueled by hype.
Blockchain and artificial intelligence researcher Vasco Lopes shared another opinion and stated, “The rise in the price of AI-related cryptocurrencies can without a doubt be driven by real and tangible developments in the AI and blockchain industries.”
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