The AI sector has been a bright spot for the stock market, leading the S&P 500 (GSPC) rally in recent months. In 2024, it’s shaping up to continue leading bullish sentiment with new advanced products and major deals from companies like Microsoft (MSFT) and Alphabet (GOOG,GOOGL). Jefferies Senior Analyst Brent Thill joins The Morning Brief to give insight into the AI sector and what investors need to know when buying into certain names.
Thill points out that big names in tech still have a ways to go as the fruit of their labor may not be fully realized until 2025: "There’s chatter that Microsoft is putting up $100 billion new data center in…You can’t do this if you’re a start-up. This is why all these AI startups are starting to find partners, OpenAI with Microsoft, Enthropic with Amazon and Google here with Oracle. You’re seeing alliances, and those alliances are coming together and building software. Again, it will be a bigger user for software for the internet and AI in 2025 and ’24 and we’ll start to see the ramp of these proof of concepts go in production, most likely in the back half of this year."
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