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How will the AI hype impact European equities?

  technology | Janus Henderson

Janus Henderson: How will the AI hype impact European equities?

John Bennett, Director of European Equities, discusses the pitfalls associated with following the ‘hype’ of artificial intelligence (AI) and highlights where opportunities lie for investors.

Key takeaways:

  • History warns investors that hype cycles, such as that seen in AI, undergo a series of ups and downs within which there will be many winners and many losers.
  • The semiconductor industry has exposure to many different secular growth themes we well as AI and therefore offers the potential for differentiation.
  • While many industries are vulnerable to the disruption caused by AI, we believe that Europe is home to many ‘old economy’ businesses that will likely not be in the crosshairs of disruption.

Equity securities are subject to risks including market risk. Returns will fluctuate in response to issuer, political and economic developments. 

Technology industries can be significantly affected by obsolescence of existing technology, short product cycles, falling prices and profits, competition from new market entrants, and general economic conditions. A concentrated investment in a single industry could be more volatile than the performance of less concentrated investments and the market as a whole.

These are the views of the author at the time of publication and may differ from the views of other individuals/teams at Janus Henderson Investors. References made to individual securities do not constitute a recommendation to buy, sell or hold any security, investment strategy or market sector, and should not be assumed to be profitable. Janus Henderson Investors, its affiliated advisor, or its employees, may have a position in the securities mentioned.

Past performance does not predict future returns. The value of an investment and the income from it can fall as well as rise and you may not get back the amount originally invested.

The information in this article does not qualify as an investment recommendation.

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