Gain investment insights into the companies driving this technological shift and their impact on global markets.
Global AI Winners: Identifying Key Investment Opportunities
Craig Blessing: Hi, I’m Craig blessing client portfolio manager for international equities at Thornburg. With me today is Sean Sun, a managing director and portfolio manager for Thornburg Equity Team. Sean, as you know, AI has been a major topic in global investing recently and a lot of the supply chain and a number of its beneficiaries are located overseas. Would you care to give us an update?
Sean Sun: You’re right. Generative AI is in a very exciting part of the market right now, as we believe it’s set to disrupt and transform companies and industries all the way from finance to health care to even creative endeavors. We see AI as this once in a decade computing platform shift akin to the internet, smartphones, or even cloud computing. AI has the potential to be quite disruptive, resulting in shifts in consumer habits and behaviors and even altering business models.
This favors our deep fundamental research process as we seek to identify and evaluate the potential winners and losers of this emerging trend. we see companies embracing AI because of the potential productivity benefits. In a world with over 1 billion knowledge workers who spend around 25% of their time on tasks that can be improved or automated with AI, the boost to productivity will be immense. But what’s often overlooked is the foundation that makes this revolution possible, semiconductors.
To support this A.I. transformation. We anticipate just the quote unquote, big tech companies alone will spend upwards of $1 trillion in CapEx over the next five years, largely on AI related workloads and largely in the form of semiconductors.
Early in any technological shift, the initial winners are the ones helping to build out the foundational infrastructure. With the early internet, it will Cisco and Sun. With smartphones, it was Qualcomm, Nokia and Ericsson. With this pattern in mind, we see semiconductors as the foundation of this revolution. The picks and shovels, so to speak, in this AI gold rush.
We did a deep dive into the global semiconductor supply chain and discovered compelling investment opportunities across the entire ecosystem. This included many international companies that are critical to this revolution, including chip designers, fabs, specialty equipment providers and assembly and testing companies.
Not all your winners are U.S. companies, and there are hidden gems throughout the international supply chain in countries such as Japan, Taiwan and Korea and the Netherlands. We even found one company, Disco, that has managed to outperform in video over the past few years. Ultimately is here to stay and we’ll become a new tech platform layer similar to the cloud or Internet. On this foundation. All sorts of software and services will be built on top. And by anticipating these developments and how spending is set to evolve, we aim to continue to invest in companies crucial to enabling IT driven future
Thank you, Sean. And thank you to all of you for listening.
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