The future of artificial intelligence (AI) holds significant promise, with analysts like Tasha Keeney from Cathie Wood’s Ark Invest estimating a $28 trillion opportunity. Keeney has identified key sectors poised to benefit from AI advancements, including companies like Tesla Inc (NASDAQ:TSLA) and drone technology.
Keeney projects that the equity market capitalization tied to innovation will soar to $220 trillion by the end of the decade, largely driven by AI. Ark Invest, renowned for its focus on innovation, has investments across various sectors, including autonomous vehicles, drones, robotics, energy storage, 3D printing, and space exploration through its Ark Autonomous Tech & Robotics ETF (ARKQ).
Autonomous vehicles, already operational in major cities globally, are expected to scale up significantly over the next decade. Keeney sees this alone as a $28 trillion enterprise value opportunity due to its disruptive nature. She highlights Tesla as a standout company in this field, citing its ongoing advancements in self-driving technology.
Despite a slight decrease in Tesla’s shares over the past year, Ark Invest maintains a bullish stance with a target price of $200, compared to the current trading price of around $178. Keeney also underscores the growing significance of drone technology, not just in the military sector but also across various industries.
This analysis coincides with Ark Invest’s recent trend of divesting shares in Nvidia due to its stretched valuation while investing in key suppliers like Taiwan Semiconductor Manufacturing Company Ltd. (NYSE:TSM). Despite this shift, Ark Invest maintains a bullish outlook on transformative technologies like AI, predicting accelerated U.S. economic growth with an average annual real GDP growth of 7% in the current business cycle.
While Ark Invest’s recognition of the growth potential in AI for Nvidia has been acknowledged, their early exit from the position has led to a missed opportunity for the flagship Ark Innovation ETF. Nevertheless, the firm remains optimistic about the transformative impact of AI and other innovative technologies on the global economy.