While it remains difficult to assess who will emerge victorious from the AI revolution and whether the sector’s exponential growth will translate into increasing and sustainable earnings over time, the consequences of AI continue to both fascinate and worry.
Initially, AI facilitates computer coding and accelerates development by 30% to 60%, depending on the software company’s project. Ultimately, AI could become so powerful that it might end up cannibalizing the very companies that initially embraced it with enthusiasm.
Software development companies such as Salesforce (NYSE:CRM), SAP (ETR:SAP), Workday (NASDAQ:WDAY), once considered indispensable, could face a more challenging near future, even though it’s likely that AI-generated code also reveals some imperfections—primarily due to a lack of human oversight.
Those who will ultimately fare best will probably be those that develop, operate, and sell the underlying infrastructure for global connected cloud computing, such as Google (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Amazon (NASDAQ:AMZN).