Buying Nvidia and other semiconductor and big tech stocks is just one way to play up the artificial intelligence theme. There are cheaper ways to play, Lanmore Fund Management’s Sean Pesch told CNBC ProTalk last week. “For the past few years, most investors have thought the only way to leverage AI is to own Nvidia and a few other peers,” the portfolio manager said. Pesce is open to leveraging the financial sector to address this topic. “It has an attractive dividend yield that is much higher than U.S. REITs,” Pesce said. “If you look at their growth and visible book value, they’re up from left to right, they’re well managed, they have low price-to-earnings ratios, and they’re getting more upside from their use of technology. ” AI will help these banks, but given that these stocks trade at P/E of just 6x, investors are “not paying” for the AI factor, he noted. did. The S&P 500, dominated by large tech companies, currently trades at 27.03 times earnings, according to FactSet data. Nvidia’s stock trades at a P/E ratio of approximately 57 times. His favorite names include French bank BNP Paribas, where he pointed out that he has identified 780 “test cases” where AI could be useful for his business. “So even things like banking can lead to cost savings. How many times have you been to a branch recently? Think about apps and chat bots. “Think about compliance and whether you want to help with compliance. There are all kinds of risks,” Pesce said. He also named ABN AMRO and UniCredit, adding that the latter is a “very well-managed” bank and one of the ones with the greatest potential to benefit from AI. “Interestingly, when we were conducting our analysis on the benefits of AI in the banking sector many months ago, UniCredit came back first among large European banks. It shows that there is a culture of seriousness about delivery,” Pesce said. Although he likes European banks in general and are all involved in some aspect of the space, he stressed that he doesn’t own a bank solely for its AI, which he says is just an added bonus.
How to play AI without owning chip stocks like Nvidia: Fund Manager
By NvidiaDaily
