AI-related stocks soar on ChatGPT craze
AI-related stocks are rallying as investors look for ways to make money off the hottest topic in Wall Street: artificial intelligence.
The AI craze is fueled by Microsoft ( MSFT)-backed OpenAI's ChatGPT. The chatbot, launched in November, has become wildly popular in the Internet and spurred discussion over efficiencies in the workplace.
Shares of AI maker C3.ai ( AI), whose clients include Bank of America, Shell, and 3M, have skyrocketed more than 100% year-to-date.
Smaller-cap, lesser-known names are also up over the last month. BigBear.ai ( BBAI), which services the health care, government and manufacturing industries, is up more than 400% year-to-date. Voice AI company SoundHound ( SOUN), also rallied in late January and is now trading about 13% higher year-to-date.
Cathie Wood, founder of Ark Innovation ETF ( ARKK), says investors should be looking at how companies harness artificial intelligence for their own businesses.
"AI is going to enable the most massive productivity increase in our history," said Wood. "We think the productivity gains is going to be astounding and shocking."
She added: "However those companies who do not embrace this rapidly enough are probably going to lose competitively."
This year's earnings season has been sprinkled with AI references.
In the company's earnings call on Wednesday night, Meta ( META) CEO Mark Zuckerberg said the social media giant is "deploying AI tools to help our engineers to be more productive."
During IBM's ( IBM) most recent earnings call, CEO Arvind Krishna said, "AI is projected to contribute $16 trillion to the global economy by 2030."
He went on to say, "We have been co-creating with many clients to deploy AI at scale."
Cybersecurity stocks are also getting a bid from AI-enthused investors. Cloud security vendor Crowdstrike ( CRWD) and network and security software provider Palo Alto Networks ( PANW) are both higher year-to-date.
"Faced with shortages in IT talent and expertise, leveraging AI-enhanced software has been an effective way to combat cybersecurity challenges for many companies, while strengthening protection efficacy and reducing workload," said Janice Quek, Equity Analyst at CFRA Research.
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