By Senad Karaahmetovic
If you've spent any time online in 2023, you may have heard about ChatGPT, an artificial intelligence (AI) chatbot developed by OpenAI and launched in November 2022. Backed by Microsoft, OpenAI’s ChatGPT allows users to "converse" with it in a simple way.
ChatGPT is democratizing AI and has prompted Big Tech to engage in an AI arms race to develop similar chatbots and ultimately incorporate them into their search engines. Internet search giant Baidu is expected to unveil its ChatGPT rival in mid-March, according to fresh reports from China.
In the meantime, Alphabet is racing to leverage its multi-year investments into AI to rival Microsoft-backed ChatGPT.
Fastest-growing app in Internet history
According to UBS analysts, ChatGPT is on pace to be the fastest-growing app in Internet history, ahead of TikTok. The bank’s analysis showed that ChatGPT is on pace to scale to more than 100 million monthly active users (MAUs). It took only 2 months to achieve this milestone while TikTok needed 9 months.
“In twenty years following the Internet space, we cannot recall a faster ramp in a consumer internet app,” analysts said in a note.
ChatGPT was launched in the final week of November and it took only a few weeks to attract 57M users in December.
The investment bank forecasts that the generative artificial intelligence (AI) market is worth about $1 trillion.
“This may seem like a crazy bullish scenario and pricing could fall, but our core point is that the market has potential to be exceedingly large,” the analysts added.
Which stocks will benefit from ChatGPT frenzy?
According to BofA analysts, companies that produce high-end chips and hardware equipment are likely beneficiaries “because the training and running of large language models like ChatGPT requires significant computing power.”
“In addition, cloud software analytics also benefit from the increase in data volumes along with cybersecurity as digital threats become more sophisticated. Sectors that could be disrupted are media (video, music, imagery) due to AI-multimodality, with heavy text and white-collar service-based industries potentially see headwinds from job automation,” the analysts wrote in a client note.
Here are 15 stocks that are likely to benefit from the ChatGPT frenzy, including a brief explanation from BofA analysts on why these companies found themselves on this list.
- Microsoft (NASDAQ:MSFT) - OpenAI ChatGPT integration into Bing search engine;
- Alphabet (NASDAQ:GOOGL) - Google search ecosystem, DeepMind Sparrow LLM, Bard AI chatbot;
- Meta Platforms Inc (NASDAQ:META) - LLaMA large language model, GPU-enabled AI research supercluster;
- Apple (NASDAQ:AAPL) - iOS licensing for default search engine (Google vs Microsoft);
- Baidu (NASDAQ:BIDU) - Google of China, Ernie chatbot;
- Nvidia (NASDAQ:NVDA) - a leader in AI arms race with GPU accelerated computing;
- ASML Holding NV (OTC:ASMLF) - a leader in EUV lithography tools enabling Moore’s Law;
- Taiwan Semiconductor Manufacturing (NYSE:TSM) - a leader in foundry chip making for high-performance computing;
- Arista Networks (NYSE:ANET) - high-throughput data centre switches for intensive AI workloads;
- Adobe (NASDAQ:ADBE) - Sensei AI platform;
- Shutterstock (NYSE:SSTK) - generative AI image partnership with OpenAI;
- Nice Ltd ADR (NASDAQ:NICE) - AI data surveillance systems;
- SAP SE (NYSE:SAP) (ETR:SAPG) - enterprise/business software AI;
- Relx PLC (NYSE:RELX) - AI-enabled information-based analytics/decision tools;
- Palantir Technologies Inc (NYSE:PLTR) - AI platforms in both commercial and government end markets.