Posted: Apr 25, 2023 at 4:13 a.m. ET
Artificial intelligence-driven interest in ChatGPT and other large language models has driven more than half of the gains in the S&P 500 this year, according to an analysis from JPMorgan.
The analysis found that interest in the topic created a market capitalization of $1.4 trillion and a gain of 45% year-to-date.
The analysis includes…
Artificial intelligence-driven interest in ChatGPT and other large language models has driven more than half of the gains in the S&P 500 this year, according to an analysis from JPMorgan.
The analysis found that interest in the topic created a market capitalization of $1.4 trillion and a gain of 45% year-to-date.
The analysis includes Microsoft
MSFT
And
Alphabet Alphabet
Google
And
Amazon.com
AMZN
And
Meta platforms
meta
And
nvidia
NVDA
and Salesforce.com
CRM
in what it calls “LLM-Innovative” stocks, and this combination outperforms the other five biggest stocks – Apple
AAPL
And
Tesla
TSLA
And
Berkshire Hathaway
BRK.B
And
United Health Group
United nations
and JPMorgan Chase
JPM
– plus components 11 through 50 in the S&P 500 and Russell 2000
rut
.
Alphabet and Microsoft both reported after the close on Tuesday.
Related: For Microsoft, artificial intelligence is the future, but the present is cloudy
This AI group accounts for 53% of the S&P 500
SPX
Performance, 54% of the Nasdaq 100
QQQ
performance and 68% growth factor gain.
JPMorgan’s team, led by Dubravko Lacos-Pojas, does not view this development favorably.
Analysts say the gains in AI, along with rotations into safety, have led to the narrowest lead for stocks in a bull market since the 1990s. “The defensive rotation and narrowing of growth leadership typically indicates a slowing cycle/slump,” the analysts say.
They say stocks 11 to 50 in the S&P 500 have more valuation support, and trade significantly cheaper than the top 10 majors. They see additional room for rotation in defenses such as health care, utilities and consumer goods.
“Typical beer advocate. Future teen idol. Unapologetic tv practitioner. Music trailblazer.”
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