Why these 'left-behinds' are the best AI plays: Strategist

As the hype surrounding artificial intelligence continues to captivate markets, investors may seek opportunities beyond the large-cap names that have dominated the spotlight. JPMorgan Asset Management Global Market Strategist Hugh Gimber joins Catalysts to highlight lesser-known AI plays.

Gimber acknowledges AI's continued strength but emphasizes that "there is no AI revolution to be had without the infrastructure to support it." He points to the often overlooked "left-behinds" fueling the AI movement as promising investment opportunities. These include data centers, clean power generation, and raw materials, making sectors such as industrials, utilities, and Asian markets well positioned for investors seeking exposure to AI plays.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Angel Smith

Video transcript

The media shares, giving up earlier gains in today's trading after his market caps are past three trillion for the first time ever.

This week you're now looking at a pullback of just around 2%.

But amid all the hype about a I in the market, our next guest still sees investment opportunity within this space.

But it's not necessarily those larger cap tech names.

He's here with some of those under the radar, please.

For more on this, we want to bring in Hugh Gimber at JP.

Morgan Asset Management global market strategist who there certainly is that no shortage of topics to talk to you about here.

But let's start with some of the excitement surrounding a I what we've seen play out for NVIDIA and a handful of those larger cap tech names.

You're actually seeing some investment opportunity outside of that.

Where and what's the play?

I think that's absolutely right.

The A I story is clearly a very powerful one, but there is no a I revolution to be had without the infrastructure to support it.

So I think where we're finding now, some of the more interesting opportunities in the market is some of the A I enablers, but really the left behind.

So I'm thinking here about data centres.

I'm thinking about clean power generation, even some of the raw materials that are required to build some of these chips.

And that takes you into, other than just technology.

Because clearly there's a lot of earnings excitement around the tech stocks in the US at the moment, but they also come at a pretty hefty price.

So for me now, the next wave of this story is to really think about some of the more reasonably priced opportunities in areas such as industrials or utilities, or even looking elsewhere in the world outside of the US, particularly towards Asia, where you have some of the really kind of key components of the A I story.

Talk to me about sussing out the trade in Asia, given some of the volatility there and frankly, at some points kind of the lack of transparency in what investors are getting into what is the kind of framework that you would advise utilising for?

Just sussing out the opportunities in Asia?

It's a really good point, and I think this is where doing your homework on the individual names that you're buying is absolutely essential.

But you take some of the examples that we find in markets such as Korea or Taiwan, and I'm not just thinking about the largest index players further down the supply chain.

This is where we're really trying to pick through, to hunt out the providers to the big players.

Because, let's be clear, you know all of the excitement around NVIDIA and other names, but that today, to me looks to be pretty fairly reflected in prices.

You go back to the start of 2023 US markets have delivered very strong returns, but 40% of those returns have come from just two stops.

So this is now where we're reliant on our boots on the ground, the underlying company, fundamental research to try and hunt out some of the companies that can feed in to the A. I story where it looks to be more fully reflected