Rapid advances in artificial intelligence will “create more losers than winners” despite a recent rally on stock markets, according to one of the largest backers of chip giant Nvidia.
Rajiv Jain, founder and chief investment officer of GQG Partners, said Silicon Valley-based technology manufacturer, whose products power AI applications including ChatGPT, will be one of only a few US stocks that remain in positive territory after the markets’ recent rebound.
Nvidia became the first chipmaker to hit a $1tn valuation this week as investors stampeded into companies that are seen as the biggest beneficiaries from developments in AI.
Its shares have soared 170pc this year, adding $575bn to the group’s market capitalisation, with GQG buying $2.3bn of shares in the first quarter and since adding to its stake.
Mr Jain told the Financial Times: “In Nvidia’s context, it [AI] is going to create some winners and losers . . . more losers than winners.
“The most obvious winners at this point, besides Nvidia, will be the larger tech names, whether it’s Alphabet or Meta or these kinds of names.”
Retail traders are riding the wave of AI mania that has swamped Wall Street, looking beyond Nvidia and C3.ai for the next stocks to pop, according to analysts.
“FOMO looks to be kicking in,” according to Vanda’s Marco Iachini, who said individual investors are now looking beyond the large-cap stocks which were initial targets.
The day-trading crowd has piled into the likes of Palantir Technologies, Marvell Technology and UiPath, pushing in millions over the past week, data from Vanda Research show.
That comes as the trio rallies in the wake of Nvidia’s blowout results.
However, retail traders are still snapping up shares of Nvidia, having plowed $285m into the company over a five-day span.
