Thematic

Let the AI revolution begin

Fidelity's Sonu Kalra explains why he believes artificial intelligence will transform the business and investing landscape.

  • Technology has revolutionized the way we live, work, and communicate over the past 20 years, according to Fidelity Portfolio Manager Sonu Kalra, who believes the revolution will roll on, driven by the ongoing emergence of artificial intelligence.
  • "The late-2022 launch of ChatGPT helped consumers and investors begin to understand the power and possibilities for AI. In fact, I would liken it to how search engine Netscape helped popularize the internet in the 1990s," explains Kalra, who manages Fidelity® Blue Chip Growth Fund.
  • In managing the domestic equity strategy, Kalra focuses on large-cap firms he thinks have above-average earnings-growth potential with sustainable business models, for which the market has mispriced the rate and/or durability of growth.
  • Some of the fund's largest investments in generative AI at the end of January are involved in the manufacturing of semiconductors—that is, microchips—which are essential to powering this technology.
  • Among them, he cites Nvidia, the leader in graphics processing units and related software that power AI models, as well as competitor Marvell Technology.
  • Kalra expects both to generate significant revenue growth the next several years, largely driven by growing demand for AI-enabled chips.
  • Furthermore, he's remained heavily invested in several other mega-cap tech-related stocks at the forefront of innovation in AI, including Amazon.com, Google parent Alphabet, Meta Platforms (the parent of Facebook and Instagram), Apple, and Microsoft.
  • Many of these firms have embraced AI for years, according to Kalra, and each has recently stepped up to make hefty investments in the technology.
  • For instance, early in 2022 Alphabet released its own chatbot, "Bard," in addition to utilizing AI to improve its Google search function and ads, among other applications. Meanwhile, Meta has made big investments to build out its AI infrastructure.
  • "It's worth taking a step back to consider that companies such as Alphabet, Airbnb, and Uber Technologies, among numerous others, would not exist, let alone even have been imagined, before the widespread use of the internet and/or smartphones," concludes Kalra. "Along these lines, I think it's highly likely that generative AI and its evolving usage will create new firms and businesses, and therefore even more investment opportunities ahead."
  • For specific fund information such as standard performance and holdings, please go to the "Funds Managed" link on this page.
 
 

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