Former Cisco chairman and CEO of JC2 Ventures, John Chambers has predicted that Artificial Intelligence (AI), will drive stock market growth for the next decade.
In an interview with CNBC, Chambers who is a respected voice in the tech industry stated that AI will not only determine the winners and losers of the tech sector, but the shares related to the technology will likely outperform non-AI stocks about three to one on returns.
In his words,
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“AI will power the stock market for the next decade. I think the overall question is if you are an investor and you invest in a portfolio of AI stocks, and if you did it consistently over the next five to 10 years, you are going to do very well.
“AI is the reason the stock market has moved so dramatically in the last 12 months. The European stocks and FTSE were slower to move, but they’ve been positive for the last six months. I think Al will be like the internet, except three to five times more powerful. It will change your life in every way.”
Chambers further highlighted the trend among Venture Capital firms investing in AI stocks with about 38% in the U.S. He forecasted an increase in the number to surge above 50% while noting that 12% of VC firms in Europe, diversified their portfolio into AI stocks over the first-quarter period.
He used American multinational corporation and technology company Nvidia, as a case study to highlight what is about to take place in the stock market. “If you watch Nvidia’s sales, that’s going to be very indicative of what’s occurring overall”, he said.
In summary, John Chambers forecast underscores the transformative potential of AI in the financial sector, suggesting that its adoption will be a key driver of stock market innovation and growth over the next decade.
As AI continues to evolve, its impact on the stock market is gradually being felt, with AI stocks performing better than non-AI stocks in recent times. As investor interest in artificial intelligence surges, many companies suddenly tout AI product roadmaps.
Notably, in the United States, investors’ enthusiasm for artificial intelligence (AI) has propelled equity markets to multiple all-time highs in early 2024. AI stocks are on a roll as investors have been reacting to signs that demand for the technology is at the start of a long period of growth. Since the beginning of 2023, AI-connected stocks have delivered 30% better returns than both U.S. and global indexes.
With the recent surge in AI stock, the biggest winner has been Nvidia, which has seen its stock up more than 200% over the last 12 months and 70% so far this year. The AI chipmaker has seen its stock soar fivefold since the end of 2022, after more than doubling in 2023. The jump in demand for AI-related products has prompted much of the firm’s rally.
Some investors have compared these outsized moves to the dot-com bubble of the late 1990s. In that period, tech stocks outperformed dramatically as investors began to recognize the potential of the internet.
As AI continues to evolve with a significant impact on the stock market, several tech giants, the likes of Meta, Microsoft, amongst others, have made moves to boost their investments in generative artificial intelligence, with the frenzy for the much-hyped sector showing no sign of slowing down anytime soon. Companies are in fierce competition, from the race to rule AI to making blockbuster investments.