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The emergence of artificial intelligence (AI) has shaken the world of finance, notably with five flagship stocks having taken control of 35.9% of the Nasdaq-100 index. This phenomenon demonstrates the meteoric rise of innovative technologies and their growing impact on stock markets.
The weight of technological giants in the Nasdaq-100
THE Nasdaq-100 is made up of the 100 largest non-financial companies listed on the stock exchange Nasdaq. This index is often used as a barometer of technology sector performance, but it also includes companies in the retail, healthcare, transportation and media sectors.
The Nasdaq-100 is weighted by market capitalization, meaning that larger companies have a greater influence on its performance than smaller ones. With the proliferation of artificial intelligence (AI), some of America’s biggest tech companies are seeing their value rise dramatically, and these five stocks now represent 35.9% of the entire index:
- Microsoft (MSFT) : Market capitalization of $3.3 trillion.
- Apple (AAPL) : Market capitalization of $3.2 trillion.
- Nvidia (NVDA) : Market capitalization of $3 trillion.
- Alphabet (GOOG/GOOGL) : Market capitalization of $2.2 trillion.
- Amazon (AMZN) : Market capitalization of $2 trillion.
The reasons for the dominance of AI
Each of these companies has an impressive track record of success and has vast financial resources to dominate the burgeoning AI industry. Here’s how they do it:
Microsoft and Azure OpenAI
Microsoft, the world’s largest company, is investing heavily in AI. With a $10 billion investment in OpenAI, creator of ChatGPT, the company has integrated GPT-4 models into its flagship products such as Windows, Edge, Bing and 365 (Word, Excel, PowerPoint, etc.).
Businesses can also use OpenAI’s models through the Microsoft Azure cloud computing platform. Currently, 65% of Fortune 500 companies use the Azure OpenAI service, highlighting the growing demand for this technology.
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Apple and the new era of AI
Apple, with over 2.2 billion active devices worldwide, recently announced its AI software named Apple Intelligence in collaboration with OpenAI. This software will be integrated into iOS 18, transforming existing features such as the Siri voice assistant and allowing you to create textual content instantly.
This advancement could trigger a significant update cycle with the release of the new iPhone 16, equipped with a new chipset specifically designed to handle AI workloads.
Nvidia and high performance GPUs
Nvidia has seen its market capitalization rise from $360 billion in early 2023 to $3 trillion thanks to growing demand for its graphics processing units (GPU) technology, ideal for training and inferencing AI models.
Nvidia’s H100 GPU is the industry benchmark, but the company is preparing to launch a new generation of chips based on the advanced Blackwell architecture, further increasing speed and efficiency.
Alphabet and AI innovation
Alphabet, Google’s parent company, has developed a series of AI models, culminating with Gemini. This chatbot can be integrated into popular Google apps like Docs, Sheets and Gmail for increased productivity.
Google Search now uses theGenerative AI to provide text-based responses to queries, improving user experience and outpacing competitors like Microsoft’s Bing.
Amazon and versatile AI
Amazon uses AI to power its recommendation engine on its e-commerce site, helping to personalize the shopping experience. In addition, its cloud service, Amazon Web Services (AWS), has developed its own data center chips and language models for AI.
With a $4 billion investment in startup Anthropic, Amazon hopes to attract more AI developers to its AWS ecosystem, strengthening its position against competitors like Microsoft Azure.
