Shelby McFaddin, an investment analyst at Motley Fool Asset Management, spoke with Quartz for the latest installment of our “Smart Investing” video series.
Watch the interview above and check out the transcript below. The transcript of this conversation has been lightly edited for length and clarity.
ANDY MILLS (AM): So Apple, Nvidia, Microsoft, all these big tech companies have seen a huge run up in the last couple years because of AI. Do you think that this enthusiasm for AI is gonna continue into the second half of the year?
SHELBY MCFADDIN (SM): I think that the level at which we’re currently sort of existing could and is likely to hold out barring a significant external force. So whether it’s a sort of macro situation that really hits Nvidia or whether it is something really devastating to the top line for Apple, things like that. Anything barring something that majorly changes their outlook, I wouldn’t be surprised to sort of see it maintain. I’m not sure that six more months would be enough time to see something significantly ramp up, barring there’s been some true innovation. Because the truth of it is, from my point of view, is that we have been in a holding period where we’re still waiting for some companies to show us what it is that they’re doing with these new capabilities. And so unless they haven’t announced anything yet and they’ve been working on it for a period of time, I’m not sure that the second half, just in and of itself standing alone guarantees any sort of large announcement that’s going to further rationalize an increase in these valuations. So I think we’re kind of about where we’re going to be for the year, but who knows? They could surprise.
AM: Yeah, that’s a good point. I feel like everybody’s like, AI is cool, we’re doing it and you’re gonna see!
SM: We’ve all acclimated to the temperature of the water now. So the question is, is it gonna remain tepid or is someone gonna make a wave?
AM: Yeah, sure. I mean like with Apple’s AI announcement recently, that seemed like the right and logical sort of move for them in the integration of it. But it wasn’t anything surprising.
SM: Right, because there’s also a difference between a new offering and a new capability. When we think about Apple’s capabilities, they’ve been at a high level for a long time, so no one’s surprised because this sort of seems like something that they should be able to do. So it’s not shocking. There are certain parts of the process that are proprietary and they won’t be easily copied per se. But there are other parts of it that other companies can go ahead and copy. You know, integration of user profiles across different platforms is definitely not new. We have seen in data-clean rooms are a great example of that integration and why companies have been chasing it for a long time. Trying to create a sort of anonymous identifier for a consumer has been being chased after for a long time now.