AI Investments: A Mixed Record in the Technology Sector

The current earnings reports of S&P 500 companies are capturing investors' interest, particularly developments in the field of Artificial Intelligence (AI). Analysts anticipate a slowdown in earnings growth: while last year's quarterly figures are expected to increase by 5.3%, the growth remains significantly below the 13.2% seen in the second quarter. The strongest increases are expected in the technology and communication services sectors, with respective forecasts of 15.4% and 12.3%. Meanwhile, the dominance of AI companies over the past year has led to substantial market gains, with the S&P 500 rising by about 21% since the beginning of the year, mainly due to the strength of the technology and communication sectors. A particular focus is on how large companies understand how to monetize their AI initiatives. Meta recently impressed with a rise in its stock price following strong revenue forecasts, while Google's spending on AI technologies raises skepticism about their integration into existing business models. With the current price-to-earnings ratio of the S&P 500 standing at 22.3—significantly above the long-term average of 15.7—investors hope for results that could justify higher stock valuations. Solita Marcelli of UBS Global Wealth Management is hopeful that third-quarter results could trigger further advancements, especially since the semiconductor sector remains a significant investment focus in the AI field. In a European comparison, Barclays recently lowered the price target for ASML Holding from 1,150 EUR to 1,100 EUR, although the "Overweight" rating was maintained. Barclays still appreciates the potential of ASML and BE Semiconductor, but advises skillfully exploiting potential weaknesses in the market environment. While ASML ranks 17th among trending AI stocks, the search for more promising AI investments remains relevant—preferably those trading at less than five times their earnings.