🔒 AI’s assessment of the stocks in the BizNews portfolios

27 Aug 2024, 09:48 by Editor BizNews · BizNews

The development of Artificial Intelligence (AI) mirrors the early days of the Internet, with its current impact still in the infancy stage compared to its potential. AI tools like ChatGPT and Grok are already proving useful in various fields, including stock analysis, indicating significant future advancements and applications. BizNews asked ChatGPT and Grok to run their rule through the stocks owned in the two BizNews Model share portfolios.

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BizNews Editor ___STEADY_PAYWALL___

The development of Artificial Intelligence reminds me a lot of the early days of the Internet. Back in 1996, when the number of people online was under 1% of the current level, there were plenty in my sector ridiculing this ‘interweb’ thing – writing it off as a flash in the pan that will never catch on. Indeed, the big media houses were so disdainful of the Web’s potential that they either shoveled newspaper content across in unabridged form; or resisted investing because of a widespread view that there were so many electronic viruses that the space would be forever toxic. It took a forceful visionary Koos Bekker to transform sleepy Naspers from Apartheid’s enabler to the New SA’s unlikely dominant force in online news. This was itself a direct result of the learnings and cash gusher which Bekker and the late Antonie Roux’s “throw-mud-at-the-wall-and hope-some-sticks” lucked out through Naspers’s purchase of 50% of Tencent for around $30m (the greatest ever private equity investment in history).

AI insiders say the sector is where the Internet was in 1996. In other words, it is under one percent of where it’s going to end up. That is an exciting thought, considering AI is already pretty good at quite a lot of things. Computer Science for one, where the ability of ChatGPT is rated as already equivalent to an “average” university-educated coder. Number crunching is another. So I asked the two AI tools I’m happy to pay for, ChatGPT and Grok, to run their rule through the stocks owned in the two BizNews Model share portfolios. The good news is none were recommended for sale. Even better news is the AI engines selected some of them for further accumulation. – Alec Hogg

Here’s the response from ChatGPT:

Tesla (TSLA – NAS)

Current Situation: Tesla’s stock is under pressure, with analysts giving mixed reviews. The average target price is around $202.12, which suggests a potential downside from the current trading level of approximately $213.21. However, Tesla remains a leader in the electric vehicle (EV) market, with strong revenue growth expected.
Recommendation: Hold. While Tesla is a long-term growth stock, the current valuation seems stretched. It’s best to hold for now and consider buying on dips.

Microstrategy (MSTR – NAS)

Current Situation: MicroStrategy’s heavy bet on Bitcoin has paid off, with the stock experiencing significant growth. The company’s inclusion in the Russell 1000 Index and its ongoing strategic pivot towards decentralized identification solutions indicate a bullish outlook.
Recommendation: Hold. The stock has significant potential tied to Bitcoin’s performance. If you believe in the long-term potential of Bitcoin, it may also be a buy on any significant dip.

Palantir (PLTR – NYSE)

Current Situation: Palantir has seen a 400% increase since late 2022, driven by its AI capabilities and government contracts. However, there’s concern about whether the stock has become overvalued.
Recommendation: Hold. Given its strong performance and the strategic importance of its AI technology, holding Palantir seems prudent, but new investors should be cautious about entering at current levels.

IBM (IBM – NYSE)

Current Situation: IBM is considered a safe, dividend-paying stock, but its growth prospects are not as exciting as some of the newer tech companies. It is slowly transitioning into a cloud and AI powerhouse, but the transformation is taking time.
Recommendation: Hold. IBM remains a stable investment for income-focused investors. It’s a hold for those looking for steady dividends with low volatility.

NVIDIA (NVDA – NAS)

Current Situation: NVIDIA is a leader in AI and gaming GPUs, with strong revenue growth driven by the AI boom. The stock has performed exceptionally well and is positioned for continued growth as AI adoption accelerates.
Recommendation: Buy. NVIDIA’s leadership in AI and gaming sectors makes it a strong buy, particularly if you are bullish on the future of AI and high-performance computing.

Amazon.com (AMZN – NAS)

Current Situation: Amazon continues to dominate e-commerce and cloud computing. While growth has slowed, the stock is still seen as a long-term winner, particularly with AWS continuing to generate significant profits.
Recommendation: Buy. Amazon remains a core holding for long-term investors, given its dominant market position and growth prospects in cloud computing and logistics.

Microsoft (MSFT – NAS)

Current Situation: Microsoft remains one of the most reliable tech stocks, benefiting from its strong position in cloud computing (Azure) and software (Office 365). The stock is considered a safe bet for long-term growth.
Recommendation: Buy. Microsoft’s robust business model and steady growth make it a reliable buy for most portfolios.

ASML Holdings (ASML – NAS)

Current Situation: ASML is crucial in the semiconductor industry, providing lithography machines necessary for chip production. With the ongoing semiconductor boom, ASML is positioned for continued success.
Recommendation: Buy. ASML is a key player in the semiconductor space, and its technology is essential for chip manufacturing. This stock is a strong buy for those looking to capitalize on the semiconductor growth trend.

FirstRand (FSR – JSE)

Current Situation: FirstRand is one of South Africa’s largest financial services groups. It has shown resilience despite economic challenges in South Africa. However, the stock’s performance is closely tied to the country’s economic conditions.
Recommendation: Hold. FirstRand is a solid, well-managed bank, but its growth is limited by the macroeconomic environment in South Africa. Hold if you’re already invested, but new investments might warrant caution.

Lesaka (LSK – JSE)

Current Situation: Lesaka, formerly Net1 UEPS Technologies, focuses on fintech and financial inclusion in South Africa. The company has faced challenges but is pivoting towards fintech solutions.
Recommendation: Hold/Speculative Buy. Lesaka is a more speculative play on fintech in Africa. It could offer significant upside if its turnaround strategy succeeds, but it’s a high-risk investment.

Proshares Bitcoin ETF (BITO – ARCA)

Current Situation: BITO is an ETF that provides exposure to Bitcoin futures. Its performance is directly tied to Bitcoin’s price, which is highly volatile.
Recommendation: Hold/Speculative Buy. If you believe in Bitcoin’s long-term potential, BITO could be a good speculative play. However, be prepared for significant volatility.

Reunert (RLO – JSE)

Current Situation: Reunert is a South African industrial group with interests in electrical engineering, ICT, and applied electronics. The company has a stable dividend but limited growth prospects.
Recommendation: Hold. Reunert is a solid dividend stock, but its growth is likely to be modest. It’s a hold for income-focused investors.

Xero (XRO – ASX) in A$

Current Situation: Xero is a leading provider of cloud-based accounting software. It has shown strong growth and is expanding internationally, but the stock is priced for perfection.
Recommendation: Hold. Xero is a high-quality company, but the valuation is high. Hold if you’re already invested, but new investors might want to wait for a pullback.

Prosus (1TY) in Euro

Current Situation: Prosus is an international internet group and one of the largest technology investors globally. It holds significant stakes in companies like Tencent. However, its share price is often affected by Tencent’s performance and the discount to its net asset value (NAV).
Recommendation: Buy. Prosus is undervalued compared to its assets, especially given its stake in Tencent. It could be a good buy for those looking for exposure to international tech at a discount.

iShares MSCI South Africa (EZA – NYSEARCA)

Current Situation: EZA provides exposure to the South African stock market. It is heavily weighted towards financials and commodities, sectors that are sensitive to the South African economy and global market conditions.
Recommendation: Hold. This ETF is a good way to get diversified exposure to South Africa, but the macroeconomic risks are significant. Hold if you want exposure to this market, but consider the risks.

Kinetiko Energy (KKO)

Current Situation: Kinetiko Energy is an exploration company focused on onshore gas assets in South Africa. It’s a speculative play with high potential rewards but also significant risks.
Recommendation: Speculative Buy. If you’re willing to take on high risk for potentially high rewards, Kinetiko could be a speculative buy. However, be aware of the exploration risks.

Lesaka Technologies (LSAK – NAS)

Current Situation: Lesaka Technologies, similar to Lesaka on the JSE, focuses on financial inclusion and fintech in South Africa. The company has potential, but it’s still in a turnaround phase.
Recommendation: Hold/Speculative Buy. Similar to its JSE counterpart, Lesaka on the NASDAQ could offer upside if its strategy succeeds. It’s a high-risk, high-reward scenario.

Purple (PPE – JSE)

Current Situation: Purple Group is a fintech company based in South Africa, known for its EasyEquities platform. It has shown strong growth but is exposed to the broader financial market volatility.
Recommendation: Speculative Buy. If you believe in the growth of retail investing in South Africa, Purple could be a speculative buy. However, it’s a small cap with associated risks.

Cloudflare (NET – NYSE)

Current Situation: Cloudflare is a leader in web infrastructure and cybersecurity. The company has strong growth prospects as more businesses move online and require robust security and infrastructure solutions.
Recommendation: Buy. Cloudflare is a growth stock with significant potential in the fast-growing cybersecurity market. It’s a buy for long-term growth investors.

Prosus (PRX – JSE)

Current Situation: Similar to its Xetra listing, Prosus on the JSE offers exposure to global tech investments, with a significant discount to NAV due to its stake in Tencent.
Recommendation: Buy. Prosus on the JSE is similarly undervalued compared to its NAV, making it an attractive buy for those looking for discounted exposure to global tech.

Uber (UBER – NYSE)

Current Situation: Uber has shown resilience in its core ride-hailing business and is expanding its delivery services. However, profitability remains a concern.
Recommendation: Hold. Uber is a long-term growth story, but the path to consistent profitability is still uncertain. Hold if you believe in its long-term potential, but it’s not without risks.

Here’s what Grok responded with: