Investors in Wall Street and other markets are optimistic about the long-term potential of the tech rally in 2023, despite some skepticism regarding the hype surrounding artificial intelligence (AI). Although they are benefiting from the AI-driven market surge through broad equity exposure, they are not fully embracing the technology yet. Half of the participants surveyed are hesitant to personally invest in AI tools for their personal or business use, and the majority of firms are not planning to use them for trading or investing purposes. This poses a challenge for companies seeking to generate profits from their significant investments in the AI era, particularly with OpenAI Inc. 's ChatGPT. Ted Mortonson, a technology strategist at Robert W. Baird & Co. , suggests that the near-term hype may be excessive. The Nasdaq 100 has experienced a significant increase of over 40% year-to-date, largely driven by demand for futuristic tech, with companies like Apple Inc. and Microsoft Corp. leading the way. The benchmark currently trades at approximately 25 times estimated earnings, exceeding its 10-year average of nearly 21. Furthermore, senior corporate executives are increasingly discussing AI during this earnings season, shifting the conversation away from an impending recession. Unlike the dot-com bubble of the 2000s, AI is not purely speculative, as there are already several practical applications in progress, albeit in the early stages. Industry giants are introducing new AI products to enhance productivity, such as Microsoft's Copilot service integrating generative AI into its Microsoft 365 software suite. Alphabet Inc.

is also incorporating AI features into its Workspace apps like Gmail and Google Docs. In addition to productivity tools, these companies are exploring AI in advertising and news organizations. Nvidia Corp. , which supplies processors used in computers powering AI applications, has experienced significant growth, with its market valuation surpassing $1 trillion. According to 29% of MLIV Pulse respondents, Nvidia is projected to become the second- to fourth-largest company in the world within the next two years. Adobe Inc. was recently upgraded by Morgan Stanley due to the potential of AI in its products. While AI is making its way into the workplace, 64% of respondents are skeptical that the technology will take over core aspects of their job within the next three years. Nevertheless, Goldman Sachs Group Inc. economists estimate that AI will impact seven in 10 US workers' jobs, albeit with only a small portion facing replacement by new technologies. Office and administrative support as well as legal functions are among the sectors most at risk. Ed Yardeni, president at Yardeni Research, believes that with advancements in AI, robotics, and quantum computing, there is a "reasonable" chance of a productivity-driven economic boom in the US, reminiscent of the Roaring 2020s. In terms of market expectations, 56% of respondents anticipate that US stocks will provide a better volatility-adjusted return than Treasuries over the next month. This reflects a slight increase from the 53% preference for stocks at the start of July in comparison to 47% favoring Treasuries. The MLIV Pulse survey, conducted by Bloomberg's Markets Live team, gathers insights from Bloomberg News readers via the terminal and online platforms.