Wall Street experts are predicting a major economic boost thanks to the rise of artificial intelligence (AI). The productivity gains expected from AI could mirror those seen during the internet boom in the 90s, leading to potential significant growth in the stock market.
According to Fundstrat’s head of research Tom Lee, the current AI frenzy is not another dot-com bubble. He predicts that the S&P 500 could rally to 5,200 this year, with potential for a 30% surge the following year. This optimism is fueled by the global labor shortage and the demand for AI automation, which is seen as a solution to a global problem.
Goldman Sachs estimates that AI could increase global GDP by 1.5% over the next decade, with investment in AI expected to reach $200 billion by 2025. The bank believes that human creativity and productivity will be enhanced by partnering with machines to solve challenges that were previously difficult.
Morgan Stanley predicts that S&P 500 firms could see a significant increase in profits due to AI, with net margins potentially rising by 50 basis points in 2025. This boost in corporate earnings is expected to impact sectors such as software, consumer services, and healthcare.
Deepwater Asset Management’s Gene Munster believes that the bull market driven by AI could continue for the next three to five years, potentially doubling the value of the Nasdaq. Similarly, Waddell & Associates’ chief investment strategist David Waddell sees AI as “business oxygen” that will boost markets for years to come due to a chronic worker shortage.
Sanctuary Wealth’s chief investment strategist Mary Ann Bartels predicts that the S&P 500 could soar as high as 5,800 by the end of the year, thanks to AI’s impact on productivity. This could lead to a 22% gain for the benchmark index, similar to the economic effects seen during the internet bubble in the late 90s.
Overall, Wall Street experts are bullish on the potential of AI to drive economic growth and stock market gains in the coming years, with many seeing it as a transformative technology that will have a lasting impact on various sectors of the economy.
