Artificial intelligence (AI) has taken the world by storm, thanks to advancements like OpenAI’s ChatGPT. However, renowned financial planner Barry Glassman urges investors to think differently when it comes to investing in AI. While the common belief is that niche AI companies or the leaders in this field are the best investment options, Glassman offers an alternative perspective.
Glassman suggests that the true winners in the AI space might not be the technology firms, but rather the companies that utilize and benefit from AI products and services. Drawing parallels to the early days of the internet, Glassman highlights that initial internet-related investments, such as AOL and Cisco, lost their prominence over time. He predicts a similar pattern for AI, emphasizing the need to look beyond the obvious choices.
Currently, finding niche AI companies open to public investment is challenging, as most of them remain privately held. However, Dan Romanoff, a senior equity analyst at Morningstar Research Services, argues that investors need not despair. Instead, he advises investing in established companies like Alphabet, Amazon, and Microsoft. These companies have proven strong fundamentals and diversified business lines that include AI, making them excellent long-term investments.
Contrary to popular belief, Glassman asserts that the largest beneficiaries of AI might not be the technology firms themselves. Rather, he suggests that sectors like biotech, pharmaceuticals, and logistics management can leverage AI to achieve unprecedented innovations. Glassman believes that in the near future, every company will either be an AI company or employ AI as a crucial part of their operations.
With this fresh perspective, investors must think beyond the confines of niche AI companies and industry leaders. The true potential lies in recognizing the companies that effectively integrate AI technology into their business strategies, ultimately transforming their respective industries.
Frequently Asked Questions (FAQ)
Q: Are niche AI companies good investment options?
A: While it may seem tempting to invest in niche AI companies, it can be challenging to find publicly available options. Instead, considering established companies with diversified business lines that include AI might be a more reliable investment strategy.
Q: Why are biotech, pharmaceuticals, and logistics management sectors expected to benefit from AI?
A: These sectors have the potential to harness the power of AI to innovate in ways previously unimaginable. By incorporating AI into their operations, these industries can achieve significant advancements and transform their respective fields.
Q: Will every company become an AI company in the future?
A: According to experts like Barry Glassman, AI is set to become an integral part of every company’s operations going forward. Whether as an AI-focused company or by incorporating AI into their existing practices, businesses are expected to tap into the benefits of AI technology.