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Stock market outlook: Stocks and the economy to soar for years on AI gains

Mar 02, 2024 - markets.businessinsider.com
Wall Street experts predict that artificial intelligence (AI) could significantly boost the economy and stock market, mirroring the productivity gains seen during the 90s internet boom. They believe that AI could drive growth and productivity, leading to a major run-up in stocks. Fundstrat's head of research, Tom Lee, predicts that the S&P 500 could rally to 5,200 this year, implying a 9% gain, and stocks could soar another 30% the following year.

Goldman Sachs estimates that AI could increase global GDP by 1.5% over the next 10 years, with investment in AI potentially reaching $200 billion by 2025. Morgan Stanley suggests that S&P 500 firms could see a surge in profits due to AI, with net margins in 2025 potentially driven 50 basis points higher. Other experts predict that the Nasdaq could double in value, and the S&P 500 could soar 22% due to AI's impact on productivity.

Key takeaways:

  • AI could significantly boost the economy and productivity, potentially leading to a major run-up in the stock market, similar to the internet boom in the 90s.
  • Experts predict that AI could increase global GDP by 1.5% over the next 10 years, and investment in AI could reach $200 billion by 2025.
  • AI could cause nearly 12 million US workers to pivot to another career by 2030, according to a recent McKinsey study.
  • Several experts predict significant growth in the stock market due to AI, with predictions ranging from a 9% gain for the S&P 500 in 2024 to the Nasdaq potentially doubling in value in the next few years.
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