Why AI presents a compelling investment opportunity

The potential pervasiveness of artificial intelligence (AI) to disrupt a broader range of industries makes for a truly compelling investment opportunity.

“We see opportunities in a variety of areas such as analysis software, in cheap fast compute power, in data generation, in automation tools as well as a variety of new usages,” says Alison Porter and Richard Clode, portfolio managers at Henderson Global Investors in a report for their global technology team.

The requirement for more data to be stored and analyzed at faster speeds is creating many opportunities for AI application in software for companies such as Adobe, ServiceNow and Saleforce.com, as well as datacentre-focused semiconductor companies like Broadcom, Cavium and Xilinx.

“We view Alphabet (Google) as a key AI enabling platform as the company is already integrating AI technology into all of its services,” says Porter and Clode.

Advances in computing power, the volume of data available and the speed and falling cost of data analysis have propelled artificial intelligence (AI) to the next paradigm shift in technology.

“We have seen this play out through the advent of personal computing, the internet age, smartphones and more recently the move to cloud computing. The team believes artificial intelligence is the next major transformative force in the evolution of technology,” says Porter and Clode.

While the world is still in the early stages of the evolution of AI technology, the pace of adoption is being accelerated by the application of cloud infrastructure.

“We believe this will continue to create opportunities for the Global Technology Strategy to invest in the longer-term beneficiaries of the AI trend and that there are multiple areas of investment potential. Over time, as the development of AI and its usage broadens we expect the investable universe to expand further as current venture capital investments become the IPOs (initial public offerings) of the future,” according Porter and Clode.

The Henderson Global Technology Team’s long-standing investment thesis is that technology will continue to be disruptive and take market share in the global economy.

Date

20 Apr 2017

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