Here's What Analysts Say About ChatGPT - And What Stocks To Buy To Capitalize On It

The launch of ChatGPT in November 2022 ignited the artificial intelligence community, with the well-liked chatbot apparently reaching 100 million active users just two months later.

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By far, ChatGPT is regarded as the most effective generative AI tool to date. It was developed by San Francisco-based OpenAI, a for-profit organization with Microsoft's support. It is able to create essays, respond to inquiries, and more.

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So-called generative models have seen an increase in popularity and performance during the past year, respectively. These are machine learning models that can create new material, which was previously thought to be the sole domain of humans, according to a note published on February 22 by HSBC analysts under the direction of Mark McDonald.

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Investors have been searching for chances in the field of artificial intelligence, with companies like Microsoft and chip manufacturer Nvidia being among the most obvious stocks to play the theme.

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Although ChatGPT is clearly a hot topic, according to HSBC, it may only represent the tip of the generative AI iceberg.

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"With any emerging technology, it is challenging to foresee all of the potential productive uses. Generative AI, however, has the potential to significantly affect a number of economic areas, the bank added.

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In the media, Big Tech, semiconductors, healthcare, education, and the consumer and retail sectors, it foresees numerous commercialization potential.

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How To Perform It

Global stocks have been selected by Morgan Stanley to participate in generative AI.

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"For several of our favored plays, only a small portion of their business is currently tied to AI, but as technology advances, they might become the "picks and shovels" for developing AI infrastructure," Morgan Stanley analyst Shawn Kim said in a note on Feb. 22.

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The largest contract chip manufacturer in the world, Taiwan Semiconductor Manufacturing Company, is one of the bank's top choices. The bank claims that it is the only foundry used by Nvidia to produce its premium graphics processor units.

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Almost 80% of the market for graphics processing units, or GPUs, which are used to accelerate AI procedures, is dominated by Nvidia.

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Samsung Electronics and SK Hynix are two additional chip stocks that reached Morgan Stanley's list.

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Apple, Seagate Technology, Dell, and IBM were listed by Morgan Stanley as US manufacturers of computer hardware that stand to gain from the emergence of generative AI.

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In a note published on February 24 by analyst Erik Woodring, he stated that "generative AI could generate more demand over a multi-year period for more powerful compute (GPU-enabled servers, AI-integrated [personal computer central processing units] and data storage (flash & hard disk drives)".

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diagnostics in medicine

The effects of AI on the field of medical diagnostics were also emphasized by Canaccord Genuity in a note published on February 20.

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"We believe there is a strong trend in the healthcare sector (including diagnostics) connected to growing adoption of AI and adjacent capabilities to improve performance of medically relevant instruments and streamline key processes," wrote analyst Kyle Wilson in the note.

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"In general, we think AI will be employed in diagnostics (and life science technologies) more and more in the future. In our opinion, early adopters should profit from this trend because the effectiveness of their products shows real benefits over those that don't use AI, he added.

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The investment bank lists Biodesix and Guardant Health among these pioneers.