Lou Basenese, chief market strategist at Public Ventures LLC, speaks with Quartz in the latest installment of our “Smart Investing” video series.
Watch the interview above and check out the transcript below. This transcript of the conversation has been lightly edited for length and clarity.
Andy Mills (AM): Nvidia’s breakthrough. Is it over already?
Lou Basenise (LB): i hope so. To stop feeling embarrassed about missing out on the run I was supposed to have last year. Amidst the first wave of hype and emerging technology trends, we see outstanding performances like his Nvidia last year. That situation continues this year, but I don’t believe it is sustainable. You’re looking at companies worth over $2 trillion. Can we get to 4 trillion? It’s less likely than finding other AI plays. And I think that’s what happens in the second phase of the growth of new technology trends. Look at these first derivative moves. This means companies doing similar things that benefit from AI tailwinds. Take a look at a company like Arm Holdings. There is no disclosure here. They are benefiting, right? They own the intellectual property for every major chip technology out there. They collect copyright fees from it. Therefore, promoting AI and electric vehicle chips will benefit Arm Holdings. You can look at AI trends from a data center perspective. The more computing power an AI has, the more data storage it requires. REITs, again, don’t have disclosures like Equinix, but I think they’re around $80 billion. One of the world’s largest data center REITs will benefit from the AI boom. And the other thing is, I think people have always looked at ChatGPT like the typical epitome of AI, but I think that’s very short-sighted because they haven’t seen any real-world applications. We just think it’s a way for teenagers to cheat and get quick answers.
AM: And adults!
lb: [laughs] And the adults. Yeah. I didn’t want to criticize my peer group, but hey, things happen. But now we are starting to see practical applications. So we actually helped a company use AI to develop a medical device that helps detect heart attacks early. This is equivalent to a 12-lead electrocardiogram that you would receive at a hospital. But it’s actually portable. Disclosed there. We bank them, but I don’t own them. My company owns a company named Heartbeam. But this is a real-world application of how AI can improve our lives, rather than just helping us cheat. So we’re going to see more innovation happen where real technology is using AI as a means to improve products and improve outcomes in many areas that are very useful in medicine, such as clinical practice and drug discovery. I think you’ll see. As a result, it will affect humanity and ultimately investors.
read more: The AI boom is not a dot-com bubble.The reason is as follows
morning: Nvidia is compared to Cisco systems In the late 90’s and early 2000’s it was due to hardware issues. Once we have enough AI hardware out there, it’s up to others to take advantage of it. And that will generate profits in the next step.
LB: Yes. Well, in the current lineup of big tech companies, Nvidia is the pick and shovel supplier, right? Anyone who does AI. Hey, you need our tip. If you look at Microsoft, they can actually drive the use of AI by putting it into their products, right? So I see Microsoft as a more attractive AI effort. There’s no disclosure there. But that’s because you can leverage AI to drive your business. Meanwhile, Nvidia is just waiting for other companies to get into AI and selling the tools that make it possible. Microsoft and companies like it aren’t just selling goods; they’re building real products that incorporate AI to generate revenue and profit.
