The AI Boom Is Paying Off. New Research Says S&P 500 Companies Using AI Tools Boost Margins By 1.5% or More. These 2 ETFs Could Be Good Buys Now.
The biggest winners of the AI boom might be found in unexpected places -- like value stocks and small-caps.
Overview
One of the biggest questions in the stock market over the past few years has been: Which companies will be the big winners of the artificial intelligence (AI) boom? Major tech companies have invested hundreds of billions of dollars in building AI models and AI data centers. But many economists and analysts have wondered where exactly the best ROI from AI would develop.
Recent earnings reports are offering some answers -- and they might be good news for the economy. According to new data from 22V Research LLC cited by Bloomberg last Friday, more companies in the S&P 500 index have started to report the impact of AI in their quarterly earnings. The research found that among companies that have quantified the results of AI on their businesses, AI technology is driving average profit margin growth of 1.50% to 1.80%.
This is great news for the AI trade, because it shows that a wide range of companies are adopting AI and using it to drive real results in their businesses' profitability. But it might be even better news for all of us. Research suggests the gains from AI will be widely shared across the economy, with greater productivity and profits for all kinds of companies that use AI tools, not just a few major tech names that build and sell them.
Details
How should you invest now to capitalize on this trend? Consider buying a low-cost S&P 500 index exchange-traded fund (ETF) or small-cap value index fund. Let's look at two funds that could fit this "widely shared AI ROI" strategy.
Source
Originally published at www.fool.com.