Tech Companies Big And Small Look To Include AI Technology And Crypto Picks Up Big Gains

TL;DR

• The Fed elected to raise base interest rates by 0.25 percentage points, sticking to the script despite financial uncertainty from the collapse of Silicon Valley Bank and Signature Bank
• AI continues to make headlines as both big and small tech companies release new products and features almost daily
• Crypto has been quietly picking up big gains, and some believe the current financial wobbles could mean it has further to run
• Top weekly and monthly trades

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Major events that could affect your portfolio

A month ago, it was all but guaranteed that the Fed would be raising rates by 0.25 percentage points in their March meeting. Some analysts were even beginning to wonder whether we’d see an increase of 0.5 percentage points, as inflation remains stubbornly high.

But after the collapse of Silicon Valley Bank and Signature Bank, this sure thing was suddenly more uncertain. Predictions swung wildly on the days leading up the announcement. Goldman Sachs and Moody’s were even predicting a total pause on rate hikes for this month.

In the end though, it was the original narrative that was followed with a 0.25 percentage point increase to the base rate.

And that made sense. The risk that the Fed would have run by deviating from the existing plan, is that it would have given the impression that they were a lot more concerned about the stability of the financial system than they were letting on.

So while a pause in hikes would have been done to provide some breathing space for troubled banks, the reality could have been the exact opposite.

For investors, the key takeaway wasn’t the number, but the comments. Chairman Jerome Powell suggested that they could be getting closer to a change in their tightening policy, which is a major departure from previous announcements and a potential welcome sign for investors.

The futures market is even pricing in a rate cut of a full percentage point by the end of the year, though Powell stated that a cut is not currently on their agenda for this year.

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The AI race is well and truly on. From the moment that ChatGPT was released into the wild, it’s been a non-stop stream of new products, features and announcements all across tech. The biggest tech giants in the world are getting in on the game, as well as countless indie developers building micro products and plugins.

It’s the latest gold rush, and just like the original, there are going to be some big winners, as well as plenty of losers along the way.

For investors, it’s actually a really challenging environment to invest in. The tech is disruptive, but this early in the cycle it’s hard to know just how much of the hype cycle is real. The key point really is that AI is not new. ChatGPT may have created a ‘wow’ factor that brought it into the mainstream, but AI is used in almost every piece of tech we use on a daily basis.

Predictive text, which is essentially all that ChatGPT is, has been around since the days of the Nokia 3310. Companies like YouTube, Google, Netflix
NFLX
and Spotify have used AI algorithms to recommend content for years. Q.ai has been using AI to help drive investment gains for years too.

The very first version of the chatbot, which would become Apple’s
AAPL
Siri, came out in 1993.

So for investors, it’s a time to be wary. Much like other hype cycles we’ve seen such as the dot com boom, there’s no way to know which AI projects have long term value and which are doomed to fail.

This week’s top theme from Q.ai

While the banking sector has had (far) better months, mainstream finance’s loss can be crypto’s gain. For a long time, Bitcoin
BTC
enthusiasts have touted the cryptocurrency as an alternative to the traditional financial system.

The financial system relies on trusted intermediaries, like banks, in order to function properly. When they mess up, it can shake the trust in the system which causes a ripple effect through the whole economy.

Bitcoin on the other hand, is decentralized. It can’t be controlled by any one organization or individual, as the network is operated by thousands of individual ‘nodes’ all across the world. Up until now, mainstream adoption has been mainly limited to speculators hoping to make bank of exponential price rises.

Some believe that the current economic environment could lead to hyperinflation in the US, which would accelerate the adoption of Bitcoin as a world reserve currency. Pretty ‘out there’ stuff. While we’re not convinced we’re about to see the downfall of the US dollar anytime soon, the recent uncertainty has been a boon for crypto.

At the time of writing, Bitcoin is up 20.84% over the past 30 days according to CoinMarketCap and up 68% year to date. It’s a similar story for Ethereum
ETH
which has gained 47% so far this year, XRP
XRP
which is up 26% and Cardano
ADA
which has jumped 44.57%.

For investors who want to hedge their exposure to mainstream financial assets like stocks and bonds, Q.ai’s Crypto Kit offers investment in all these and more, and uses AI to automatically rebalance these holdings through the use of crypto public trusts.

Top trade ideas

Here are some of the best ideas our AI systems are recommending for the next week and month.

Texas Capital Bancshares (TCBI) – The Texas Capital Bank holding company is one of our Top Buys for next week with an A rating in our Growth factor. Revenue grew 23.7% in 2022.

Seagen (SGEN) – The biotech company is our Top Short for next week with our AI rating them an F in Quality Value. Earnings per share were -$3.30 in 2022.

Franklin Street Properties (FSP) – The real estate investment trust company is our Top Buy for next month with an A rating in Growth and Technicals. Gross profit margin was 47.2% in 2022.

IronNet (IRNT) – The online car dealer is our Top Short for next month with our AI rating them an F in Quality Value. Earnings per share were -$2.81 in 2022.

Our AI’s Top ETF trades for the next month are to invest in gold miners and consumer discretionary stocks, and to short US momentum stocks and mid cap value stocks. Top Buys are the VanEck Gold Miners ETF, iShares Global Consumer Discretionary ETF and the Vanguard Consumer Discretionary ETF and Top Shorts are the iShares MSCI USA Momentum Factor ETF and the Vanguard Mid-Cap Value ETF.

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