Gene Munster, a veteran technology analyst and managing partner at Deepwater Asset Management, said the bull rally in U.S. stocks is expected to continue to rise over the next three to five years before ending in a surprising bubble burst.
Munster still remembers his experience as a technology analyst during the Internet boom and bust in the 1990s, so he did not easily make such predictions. However, he believes that driven by the increasing popularity of artificial intelligence technology, U.S. stocks may rise sharply and may eventually fall.
Munster told foreign media last Friday: "megadicelottoWe are in the early stages of a three to five-year bull market, which may seem inappropriate considering recent market performance, but if you end up believing that artificial intelligence is more substantial than hype, the market will continue."
Munster said broader technology trading will continue to drive U.S. stocks higher, but investors should not just hope that ultra-cap technology stocks will drive most of the stock market's gains. Instead, Jean believes that most of the upside from the inflation of the stock market bubble will come from small companies focused on artificial intelligence.
Munster said,"The essence of the bubble will come from different types of technology companies that will drive stocks up. I think part of it will be artificial intelligence IPOs."
At the same time, Munster said technology stocks in the "Big Seven" should "continue to be well positioned and they will benefit from it, but this is not where you can get this kind of 2-to 3-fold appreciation."
Munster is optimistic about artificial intelligence technology because he believes it will have twice the impact of the Internet.
Munster said: "To me, the concept of machines being able to operate with universal intelligence is twice as big as the Internet. I think this will come from some smaller mid-cap companies and some IPO companies that will eventually become the next 'Big Seven U.S. stocks' in five years."
Although Munster believes that the rally in U.S. stocks will turn into a bubble, this does not mean that investors should avoid holding for now."Although this will end in the bubble bursting, a lot of wealth can still be created from now until then."
Munster also emphasized that Alphabet (GOOGL) is a key player in Deepwater Asset Management's technology-focused portfoliomegadicelotto.US) and Meta Platforms (META.US) have become unique flagship holdings due to the artificial intelligence technology they build internally.
Munster said: "These two companies are unique because their AI future does not depend on others. If you look at Microsoft (MSFT.US), Apple (AAPL.US), look at Amazon (AMZN.US), all of these companies need third-party models to really drive what they are doing right now."
"So when I think about who will be the biggest winners in artificial intelligence, I think it comes down to Meta and Google."
