Company Interview / Three AI leaders to watching for market outperformance

Key points:

AI-focused mega caps such as Alphabet (NASDAQ:GOOGL) continue to drive market gainsOpportunities exist among smaller players, notably SK Hynix (KRX:000660) and ServiceNow (NYSE:NOW)Tesla (NASDAQ:TSLA) currently faces declining margins and weaker US demandPersistent US inflation and global economic uncertainty support exposure to gold and silver

Artificial intelligence remains the dominant trend in global markets, according to Brad Gastwirth of Unearthing Opportunities. Gastwirth states that companies investing heavily in AI will continue to outperform, while those neglecting the technology risk falling behind. The market rally is still largely centred on mega cap stocks with substantial AI exposure, such as Alphabet (NASDAQ:GOOGL). Gastwirth points to Alphabet’s recent results as particularly compelling, flagging its robust execution, strong YouTube numbers, and substantial capital expenditure. He also highlights Alphabet’s exposure to private companies like Waymo, seeing significant potential in robo-taxi technology.

Beyond mega caps, Gastwirth singles out SK Hynix (KRX:000660) as a leader in high bandwidth memory crucial for AI systems, noting its strong market share and improving margins. ServiceNow (NYSE:NOW) is described as one of the top enterprise software firms, with robust global client growth providing further upside. Gastwirth sees both stocks as attractive plays for AI-driven growth. In contrast, Tesla (NASDAQ:TSLA) remains under pressure, with declining margins and reduced consumer sentiment in the US, and Gastwirth currently avoids the stock.

On the macro front, Gastwirth observes persistent inflation in the US, especially in food and energy. He anticipates prices may continue to rise, particularly if interest rates are cut, and maintains a positive stance on holding precious metals like gold and silver as portfolio hedges.