The latest episode of Outperformance Matters, the Blue Whale Capital podcast features a detailed discussion on AI, a topic which has been at the forefront of investors’ minds for many months now.
Clearly those investors who have not had an allocation to AI have found it very hard to outperform the market but what might happen next? The conversation goes on to look at how Blue Whale is approaching this sector and highlight some points that investors need to look out for.
While huge amounts are being spent on AI, we are still in the early stages so it’s important to understand who is on the receiving end of this spending when thinking about which companies to invest in. While some areas of AI, such as the use of LLMs in software have already shown their worth, other areas still have a long way to go.
What is certain is that AI will change the world and companies with huge data sets have a significant advantaged. Personalised holidays that are fully managed by an AI agent, AI driven drug discovery and personalised medicine are two areas that have huge potential for example. But companies in these sectors, and others, need to act fast as within five years they may find that competitors with the right AI solutions have overtaken them.
Looking ahead, investors need to keep their eyes open on developments and to scan the globe as China, Taiwan and other Asian markets continue to play an important role in the development of the sector.
This week’s Myth Busting segment looks at the idea that share price volatility is a risk. The fact is that prices will go up and down and that what investors should really be paying attention to are the long term fundamentals and cyclical changes which can result in the real loss of capital.
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