The 2024 election is shaping up to be the wildest in recent history. In just one month, the American people have witnessed an assassination attempt on one candidate and the dropping out of the other. Yet, the assassination attempt on former President Donald Trump earlier this month and the announcement of President Joe Biden dropping out of the race earlier this week underscore one thing: there’s a long road to election day in November, and anything can happen on the way.
One industry that is even more unpredictable in the current political climate than any other is artificial intelligence. Both capable of forwarding humanity and forever changing the economy, AI has yet to encounter the regulatory hurdles coming its way as it becomes a mainstream technology in the global economy. Despite this, Trump has repeatedly hinted at a lighter regulatory environment for the technology, intending to see its prospects grow rather than constraining it to a few applications. As such, here are three AI stocks to keep in mind should Trump return to the White House.
Microsoft (MSFT)
Arguably the current industry leader through its close partnership with OpenAI, the classical tech giant, Microsoft (NASDAQ:MSFT) stands to gain an exceptional amount of value should a second Trump administration occur. That’s because Trump’s executive appointments tend to favor looser tech research regulations alongside broader market regulations.
As a result, many of the deals OpenAI is currently pursuing with content giants like News Corp (NASDAQ:NWSA) and Reddit (NASDAQ:RDDT) are likely to remain free from government obstruction. This would mean MSFT and its OpenAI-codeveloped projects will have unfettered access to mountains of training data, eventually increasing the value of their respective large language models.
As a result, investors may want to keep a close eye on Microsoft’s regulatory plays as the election nears, because it could give hints as to its preparation for a potential Trump victory. Moreover, the more rapidly MSFT can develop its various AI products, the quicker its value will rise among AI stocks.
International Business Machines (IBM)
As far as beneficiaries from unrestricted AI research go, International Business Machines (NYSE:IBM) is one of the earliest AI developers that continues to push the edge of computer science. This can be seen in one of its newest iterations of the Watson AI, which it calls the Watson Studio. Through this open-source application, IBM has the potential to become a critical member of the future of AI training.
IBM’s new platform is intended to proliferate AI by enabling smaller-scale developers to design and implement their own AIs and machine learning training. This enables data scientists and software engineers to customize the Watson AI foundation to meet their specific needs while providing valuable data and insights to IBM’s development team.
Should Trump return to the White House, many of the hurdles around data privacy and sharing between AI providers and their customers could be lowered in favor of improved technological progress. This would, in turn, greatly improve IBM’s prospects for growth among other AI stocks.
Amazon (AMZN)
Considering how prominent Amazon (NASDAQ:AMZN) has become through its data center and cloud computing business unit, a Trump presidency could be beneficial for a few different reasons. The first and most obvious comes from Trump’s tendency to cut taxes on large businesses as a way to stimulate economic growth through providing more capital for re-investment. The second is through Trump’s policies which aim to make energy cheaper.
That second one is critical for AI stocks like AMZN since the company consumes enormous quantities of electricity to power its data centers for AI processing. Should these sorts of policies take effect, Amazon’s fastest-growing revenue driver, Amazon Web Services (AWS) will likely see even more revenue growth.
As such, AMZN stock could be a safer play among AI stocks as it aims to dominate the computing infrastructure space necessary for AI services. Then pair this ambition with Trump’s easy-on-business approach and AMZN stock seems like an even better investment for the next four years.
On the date of publication, Viktor Zarev did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
On the date of publication, the responsible editor did not have (either directly or indirectly) any positions in the securities mentioned in this article.
