Former Cisco CEO John Chambers told CNBC on Wednesday that artificial intelligence will drive the stock market over the next decade.
Chambers, founder and CEO of JC2 Ventures, said not only will AI determine winners and losers in the technology sector, but technology stocks outperform non-AI stocks by about 3 to 1. He said it was highly likely.
“AI will power the stock market for the next decade,” Chambers told CNBC’s Karen Tso on the sidelines of the VivaTech conference in Paris.
“As an investor, when investing in a portfolio of AI stocks, the overall question is: [if] If we do that consistently over the next five to 10 years, we’ll do very well. ”
Chambers said 38% of U.S. venture capital in the first quarter was invested in AI stocks. He expects this share to increase to “well over” 50%, while assessing that 12% of venture capital was invested in European AI stocks in the first quarter.
AI chip manufacturer Nvidia The company’s stock price has soared fivefold since the end of 2022, and more than doubled in 2023. Rapidly increasing demand for AI-related products was a major factor in the company’s stock price rise.
Chambers compared Nvidia’s position in the AI market to Cisco’s. in the internet market. “If you look at Nvidia’s sales numbers, that would be very indicative of what’s going on overall,” he says.
Publicis chairman Maurice Levy stressed that AI will be “transformative” as the technology will undoubtedly eliminate some jobs, while at the same time creating more value-added roles.
“We don’t expect it to be a net negative. We expect it to be a net positive,” Levy told CNBC on Wednesday, “and the faster companies adopt AI, the more they’re going to grow and create really big value-add jobs.”
of S&P500 And that Nasdaq Composite Shares rose to a new all-time high on Tuesday as investors awaited earnings from Nvidia. The Nasdaq Composite Index has risen about 12% since the beginning of the year.
“AI is the reason why stock markets have moved so dramatically over the last 12 months,” Chambers said. “European stocks and the FTSE have been slow but have been positive over the last six months.”
“I think AI will be similar to the internet, except it will be three to five times more powerful. It will change your life in every way.”
–Karen Gilchrist contributed to this report.