AI is the buzzword for 2023 that shows no signs of slowing. Microsoft (MSFT) unleashed Artificial intelligence to the public, offering ChatGPT and Dall-E. This forced Alphabet (GOOG) to take its Bard AI out of beta.
The FOMC’s decision last week to pause interest rate hikes helps ignite economic growth. Although it undermines its fight against inflation, the booming market will increase AI’s growth. Companies cannot risk falling behind in offering AI solutions. Websites and services will need a chatbot to serve customers.
Ahead of the Fed pause, Apple (AAPL) gained around 50% YTD. Microsoft is up by the same. Tesla (TSLA) and Meta (META) gained even more. The booming economy increases customer spending behavior, which should drive Tesla EV sales higher.
Meta thrives in this environment, too. Advertisers who cut back on spending will open their budgets. They will allocate their ad spending to the biggest platforms. This includes Meta’s Instagram and Facebook. Alphabet’s Google.com site will post a slower decline in ads. revenue.
Though all of the stocks mentioned are up by a frightening magnitude, the Fed pause could lift their stock price further.
Investors who missed 2023’s rally should not chase it. The Fed plans to raise rates two more times this year.
