Retail investors flock to small-cap AI firms as Big Tech battles for share
Add BT as a preferred source
DeeperDive is a beta AI feature. Refer to full articles for the facts.
RETAIL investors are piling into small-cap firms that employ artificial intelligence amid intensifying competition between tech titans Google parent Alphabet and Microsoft to secure leadership in the next big driver of growth.
The viral success of ChatGPT has turned the spotlight on artificial intelligence (AI) on Wall Street, reminiscent of the blockchain hype from a few years ago when shares of companies remotely associated with the technology surged.
The US$3-billion AI software firm C3.ai was the fifth most actively traded on Fidelity’s platform for small investors on Monday (Feb 6), while drawing record daily retail inflows worth US$31.4 million, as per Vanda Research.
The stock slipped 4.5 per cent on Tuesday, but is up about 140 per cent so far this year.
“Small-cap firms have AI as a much larger part of their business than the larger ones,” said Matthew Tuttle, chief executive officer of Tuttle Capital Management on the reason behind retail investors’ focus on the smaller firms.
Tuttle said he had shorted C3.ai shares about a week ago, but was looking to switch to the long side because “that’s where the action is.”
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
Shares of SoundHound AI, which offers a voice AI platform services, and Thailand’s security firm Guardforce AI have more than doubled so far this year, while analytics firm BigBear.ai gained nine-fold in value.
SoundHound AI was last up 4 per cent and Guardforce AI added 12 per cent, while BigBear.ai slipped 10 per cent.
Shares of Microsoft, which backs ChatGPT parent OpenAI, gained about 2 per cent ahead of a potential AI launch later in the day.
Google-owner Alphabet on Monday said it would launch a chatbot service Bard and more artificial intelligence for its search engine as well as developers.
Microsoft is in a strong position in the AI race due to the combination of its close partnership with OpenAI and its Azure capabilities around compute and data, said Barclays analyst Raimo Lenschow.
US-listed shares of Baidu climbed nearly 15 per cent on Tuesday after the Chinese search engine said it would complete internal testing of a ChatGPT-style project called “Ernie Bot” in March. Earlier in the day, a clutch of Chinese AI stocks had also rallied.
“The market is right now trying to search for what would the next big thing that’s going to lead markets over the next 10 years and AI is that,” said Chen Zhao, chief global strategist at Alpine Macro.
“It could be speculative in nature, but everybody thinks that it’s going to be a big deal going forward.” REUTERS
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Share with us your feedback on BT's products and services
TRENDING NOW
Autobahn Rent A Car directors declared bankrupt over S$50 million each owed to DBS
Amazon’s MGM Studios gains creative control over ‘James Bond’ franchise
UOB’s Wee Ee Cheong says S$4.9 billion Citi deal ‘paying off’ as Asean push accelerates
In taxing wealth, how far can Singapore push property owners?
