The ongoing bullish sentiment around the stock market has been primarily attributed to companies venturing into the artificial intelligence (AI) sector.
Notably, these companies significantly control major indices, leading to concerns that the AI bubble might burst, reminiscent of the 2000 Dot-com bubble. Uncertainty regarding a potential recession hitting the US economy further exemplifies the possibility of a bubble burst.
Indeed, if the AI sector faces a downturn, certain companies could stand out and weather the storm. In this context, Finbold explored OpenAI’s latest and most advanced AI tool, ChatGPT-4o, to determine which stocks are likely to show resilience in the event of a bubble burst. Below are the three stocks by the AI tool.
Picks for you
Microsoft
According to ChatGPT-4, Microsoft’s (NASDAQ: MSFT) diversified business model is a cornerstone of its resilience. The tech giant generates substantial revenue from its cloud computing division, Azure, and its widely-used software products, such as Windows and Office.
Microsoft’s strategic partnerships and investments in AI, including a notable stake in OpenAI, also integrate AI advancements into its broader ecosystem. This diversification provides a substantial buffer against a sector-specific downturn.
The platform noted that Microsoft’s strengths are its diversified offerings, robust balance sheet, and leadership in cloud computing and enterprise software, ensuring it remains a formidable player even in a volatile market.
Indeed, in 2024, MSFT has maintained a bullish stance, gaining over 21% on a year-to-date basis, trading at $449.78 by press time.
Alphabet
The second selection by ChatGPT-4 is Alphabet, the parent company of Google. The platform noted that Alphabet (NASDAQ: GOOGL) boasts a well-rounded revenue base encompassing its core advertising business, Google Cloud, YouTube, and various AI initiatives.
ChatGPT noted that Alphabet mitigates the risk of a sector-specific crash by embedding AI into its extensive ecosystem. Its innovation in AI and technology, backed by significant cash reserves, positions it to remain resilient.
Alphabet’s diversified revenue streams, continuous innovation in AI, and considerable financial reserves highlight its capacity to navigate potential market disruptions effectively.
By the close of markets on June 22, GOOGL was valued at $179, with YTD gains of almost 30%.
Nvidia
Nvidia (NASDAQ: NVDA) is a critical player in the AI sector, renowned for its high-performance GPUs, which are essential for AI and machine learning tasks. Indeed, Nvidia’s venture into AI has significantly elevated it, making it one of the world’s most valuable companies.
According to ChatGPT, beyond AI, Nvidia’s technology is vital for data centers, gaming, and autonomous vehicles, offering a diversified portfolio. This broad applicability ensures Nvidia’s stability across various tech sectors, not just AI.
The tool noted that Nvidia’s leadership in GPU technology, diverse applications of its products, and strong partnerships across the tech industry equip it to withstand sector-specific challenges and thrive in diverse markets.
At the moment, NVDA is trading at $126.57, having gained over 160% in 2024.
In conclusion, the AI tool noted that as the AI sector evolves, these three companies exemplify how a robust and diversified business approach can provide stability and growth potential, even in the face of market volatility.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
