Nvidia and Microsoft CEOs say industrial -2-
For the long-term adoption of AI by heavy industry, Reyna pointed to Amazon.
"They have AI robots able to distinguish certain packages by color. You begin to see, anecdotally, that these devices are probably going to revolutionize the industrial world," he said.
Within the IGPT portfolio, Reyna highlighted companies making AI strides with software, including Meta Platforms Inc. (META), which he said is "trying to get more involved with chatbots," and Adobe Inc. (ADBE), which has "rolled out generative fill-in in Photoshop," as well as Firefly, an AI tool that can be used with various Adobe software platforms.
He also mentioned a piece of "older news," which was Intel's work with Volkswagen AG (XE:VOW) unit Audi "to automate and enhance critical quality-control processes in their factories."
Here are the top 10 stocks held by the Invesco AI & Next Gen Software ETF, which together make up 60% of the portfolio:
Company Ticker % of IGPT Adobe Inc. ADBE 8.2% Meta Platforms Inc. Class A META 8.1% Nvidia Corp. NVDA 7.6% Alphabet Inc. Class A GOOGL 7.3% Advanced Micro Devices Inc. AMD 7.3% Intel Corp. INTC 6.5% Qualcomm Inc. QCOM 4.6% Intuitive Surgical Inc. ISRG 4.1% Keyence Corp. JP:6861 3.3% Micron Technology Inc. MU 3.1% Source: Invesco
Hendi Susanto of Gabelli Funds
Hendi Susanto, a portfolio manager at Gabelli Funds, believes the pace of AI adoption will vary by industry.
"Investors and markets usually point to financial services for technology adoption," he said, "as apposed to agriculture, where they are still talking about IoT adoption." IoT stands for Internet of Things, which describes the network integration of physical objects, such as switches and sensors, and which is no longer a cutting-edge technological concept.
When asked if it might be too early for investors to focus on heavy-industrial companies' adoption of AI, Susanto said yes, adding that "AI will still require the basic building blocks of IT infrastructure. This includes computing, storage and networking."
For AI implementation, there are two standards for network connectivity, Susanto said. "One is web-based, the other is InfiniBand," which is a high-performance connectivity standard that "Nvidia owns," he said.
He emphasized that heavy industry will need to employ "building blocks" to bring computer networks up to standard for eventual adoption of AI.
C3.ai Inc. (AI) "wants to provide large-scale AI software platforms for different applications, including the oil and gas industry, for example," Susanto said.
Moberg agreed, saying a "favorite example" of an AI application for the energy industry is building artificial data for use in oil extraction. "With some of the models now, you can drill fewer holes while looking for natural resources," he said.
Don't miss: Here's why Nvidia is a compelling stock when compared with the rest of the 'Magnificent Seven'
-Philip van Doorn
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12-05-23 0702ET
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