June 26, 2023

The Markets

The Artificial Intelligence (AI) Express is traveling fast.
Investors are enthusiastic about AI. Late last year, an AI research lab introduced a chatbot that could answer questions – and people were enthralled. Within two months of its introduction, more than 100 million people had engaged with the technology, reported David Curry of Business of Apps. It wasn’t long before AI platforms that could generate images and audio, and help with coding were released.
It’s difficult to know whether investor enthusiasm influenced companies, but more firms mentioned artificial intelligence on recent quarterly earnings calls than ever before. AI mentions were up 77 percent during fourth quarter calls (after the chatbot was released) and reached an all-time high on the most recent round of calls, reported Jennifer Ryan of Bloomberg.
Between March 15 and May 25, AI was mentioned on the earnings calls of 110 companies in the Standard & Poor’s (S&P) 500 index, reported John Butters of FactSet. The sectors where AI was mentioned the most were:

  • Information technology (IT), which includes industries like semiconductors, software, and IT services;
  • Industrials, which includes industries like aerospace and defense, air freight and logistics, transportation, and construction and engineering; and
  • Communication services, which includes industries like telecommunications services, entertainment, and interactive media and services.

Recent stock market gains have been attributable, primarily, to seven large stocks, five of which are in the IT and communication services sectors. Last week, as major U.S. stock indices gave back some gains, three of the companies finished the week higher and two outperformed the index, reported Al Root of Barron’s.
U.S. stocks dropped last week largely because investors didn’t like what Federal Reserve Chair Jerome Powell had to say. He suggested there could be more rate hikes this year, and that revived recession concerns, reported Stephen Culp of Reuters. Yields on most U.S. Treasuries finished the week unchanged or higher.


Weekly Focus – Think About It

“It is change, continuing change, inevitable change, that is the dominant factor in society today. No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be.”
—Isaac Asimov, biochemistry professor and author

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* These views are those of Carson Coaching, not the presenting Representative, the Representative’s Broker/Dealer, or Registered Investment Advisor, and should not be construed as investment advice.
* This newsletter was prepared by Carson Coaching. Carson Coaching is not affiliated with the named firm or broker/dealer.
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* Consult your financial professional before making any investment decision.
https://www.bloomberg.com/news/articles/2023-05-05/ai-scores-as-hot-topic-on-earnings-calls-as-interest-deepens#xj4y7vzkg (or go to https://www.bloomberg.com/news/articles/2023-05-05/ai-scores-as-hot-topic-on-earnings-calls-as-interest-deepens#xj4y7vzkg) 
https://www.barrons.com/articles/ai-stocks-are-a-long-way-from-a-bubble-a1a274d4?mod=hp_LEAD_3 (or go to https://resources.carsongroup.com/hubfs/WMC-Source/2022/06-26-23_Barrons_AI%20Stocks%20Are%20a%20Long%20Way%20from%20Bubble%20Territory_4.pdf) 
By Published On: June 27th, 2023

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