Artificial intelligence is all the rage right now. And according to tech investor Mark Hawtin, there’s a smart way to jump on the trend: playing the data theme. AI has taken Wall Street by storm since since ChatGPT was launched and went viral — causing a surge in interest among investors in what stocks could benefit from the trend. Stocks such as tech giant Microsoft, which backed ChatGPT, Alphabet — which developed a chatbot — as well as semiconductor firms like Nvidia have come up as obvious plays on AI. ChatGPT was created by San Francisco-based OpenAI , a private company backed by Microsoft . It can answer questions, write essays and more. But Hawtin, investment director at Zurich-based GAM Investments, has identified data as another way to get into the game. “If we make the assumption that data is the new oil from a corporate perspective, it’s what is absolutely required, it’s the edge in business — then that data has to be stored,” he told CNBC Pro Talks last week. Data generation is growing by between 30% and 40% every year, according to Hawtin, who added that he likes data storage companies. “These chatbot AI products utilize huge amounts of data in their learning process. So the ChatGBT 4.0, which is not being released yet, will use a massive multiple of the amount of data that the existing [version] 3 product users,” he said. Hawtin added there will be a need to store more of this data. Stock picks His favorite stock with the data theme? The U.S. data storage company Seagate. “A lot of people will say, oh it’s a hard disk drive manufacturer that surely is old tech. And of course it is — we don’t see it anymore in our laptops. But 70% or more of data is still stored on hard disk drives,” Hawtin said. According to FactSet, analysts covering Seagate shares gave it average upside potential of around 6%. Hawtin isn’t the only one to flag hardware companies as a way to invest in AI. Morgan Stanley named Apple , Seagate Technology , Dell , and IBM as tech hardware companies that could benefit from the rise of generative AI. “Over a multi-year period, generative AI could drive greater demand for more powerful compute (GPU-enabled servers, AI-integrated [personal computer central processing units] and data storage (flash & hard disk drives),” analyst Erik Woodring wrote in a note on Feb. 24. Hawtin also named Nvidia as another stock to get into the AI buzz. “I think Nvidia is a really good way to get exposure to this,” he said. “The thing about Nvidia … is that GPUs process a lot of data in parallel, which is critical, whereas the CPU companies AMD and Intel are doing serial processing. And that’s why Nvidia has become so important to many of these applications,” he said. — CNBC’s Michael Bloom, Zavier Ong contributed to this report.
Menu
