Artificial intelligence will change the rules of the investment game – News

Artificial intelligence (AI) will be a game changer for investing, primarily because it is causing major disruptions in the tech industry and beyond, experts say.

“In the past, technology cycles occurred approximately every 15 years, and each cycle led to profound changes in the economy and industries. From mainframe computers in the 1960s to the development of personal computers and smartphones, each cycle saw increased demand for key technologies such as semiconductors, which tripled or quadrupled in demand during these periods. “Artificial intelligence is triggering the next big cycle,” Wesley Lebeau, deputy head of global thematic equities at Amundi Investment Institute, told Khaleej Times.

It is unlikely that AI’s impact will end in the technology sector; this is likely to have a positive long-term positive impact on productivity and GDP growth. However, Amundi analysts say that not every company will benefit equally. “There will be clear winners and losers in this new AI-powered cycle. Companies that are early adopters of AI, have a proprietary data advantage, and have existing competitive advantages are likely to outperform. For those that fail to innovate or rely solely on implementing AI technologies without a clear advantage, their competitive advantage may be weakened,” Lebeau said.

Over the next few months, markets will focus on economic activity and employment data, playing a key role in stock market performance. The direction of monetary policy will depend on the data. The key trend that will gain momentum under the soft landing scenario is the capital spending cycle related to the modernization of energy infrastructure and networks. “As industries and governments strive to meet growing energy demands, modernizing aging infrastructure is becoming an urgent priority. After almost two decades of stagnation, electricity demand is growing rapidly, representing a major turning point in global energy management, driven in particular by the exponential expansion of energy-intensive facilities such as data centers to ensure a reliable and efficient energy supply,” said Vafa Ahmadi, Director for global thematic campaigns at Amundi.

Investing in disruptive sectors can be extremely rewarding and provide the potential for exponential growth as industries are transformed by disruptive innovations. However, with great opportunities comes increased risk, experts warn. “To successfully navigate these rapidly evolving markets, investors must consider several key factors that go beyond superficial buzzwords. This includes understanding the underlying technology, competitive landscape, assessing the potential market to address, scalability and speed of adoption. Investors should consider diversifying their exposure across multiple breakthrough themes rather than concentrating all their investments in one area. This not only reduces the risk of underperformance in one specific area, but also allows investors to capture opportunities across a broader range of innovations,” Ahmadi added.

Wesley Lebeau (left) and Vafa Ahmadi

A key investment sector is the circular economy. Investing in a circular economy involves supporting businesses and initiatives that aim to reduce waste, promote resource efficiency and create a more sustainable and regenerative economy. “One of the main goals of the circular economy is to keep products and materials in circulation for as long as possible. This can be achieved through practices such as product recycling, which enables the recovery of valuable materials from end-of-life products. Waste disposal is also an important element of the circular economy, as it aims to minimize the environmental impact of waste by recycling or converting it into energy,” Lebeau said.

In addition to recycling and waste treatment, it is also important to consider other circular economy strategies such as leasing and reuse. Leasing allows consumers to rent products rather than purchase them, which promotes reuse and reduces waste. “By choosing leasing, the products can be used successively by many people, thus extending their period of use. Redesigning products for reuse is another key practice of the circular economy, which involves extending the life of products by repairing, refurbishing them or finding alternative uses for them, Lebeau said.

A circular economy also encourages a shift to clean energy or renewable energy sources. This may include investing in renewable energy technologies such as solar, wind, hydro or geothermal energy. By using renewable energy sources, we can reduce our dependence on fossil fuels and reduce greenhouse gas emissions. Finally, the circular economy promotes responsible consumption and supports brands that adopt sustainable and responsible practices. “This may include purchasing durable and high-quality products designed to last, purchasing products from sustainable and ethical sources, and supporting brands that have a good reputation for social and environmental responsibility. By choosing to support these brands, society can encourage other companies to adopt similar practices, especially in an increasingly social network-driven environment,” Ahmadi said.