It’s a familiar pattern for technological innovation, from nineteenth-century railroads to the development of the Internet. But when it comes to AI, Chronert sees it happening with relatively rapid speed: He says it may become ingrained in the operations of a wide range of businesses in as little as two years, boosting earnings with cost savings and productivity gains.
“It gives the market in general a new growth thing, and we haven’t really had a new growth thing for some time,” he said. And on Monday, the S&P 500 was headed toward its first back-to-back gain this month, with Nvidia among the top drivers of the advance. According to Chronert, the release of first-quarter earnings prompted a rush into anything AI related after revealing how a handful of the biggest companies, like Microsoft Corp. and Amazon.com Inc., were planning to deploy it. In the second quarter, however, the attention shifted to how the impact will be felt more broadly — setting the stage for it to start cropping up in a wider array of stock prices.