Market Outlook: AI infrastructure and fintech attract investor interest
BNN Bloomberg
Citi’s Drew Pettit explains why AI enablers and select fintech stocks remain attractive as volatility weighs on growth shares.
BNN Bloomberg spoke with Drew Pettit, U.S. equity strategist at Citi, about why he favours small- and mid-cap AI enablers, how valuation concerns are weighing on software stocks, and where fintech firms tied to consumer and small-business credit could benefit if liquidity improves.
Read the full transcript below:
ANDREW: It’s never easy for investors to make heads or tails of markets, but it’s especially challenging right now. Our guest says he’s still generally comfortable with value stocks, particularly small- and mid-cap names tied to artificial intelligence. He looks for what he calls AI enablers.We’re joined by Drew Pettit, U.S. equity strategist at Citi. Drew, always great to hear from you. Thanks very much for joining us. We’ll get to some of your stock ideas shortly, but first, what do you mean by AI enablers?
DREW: We think about AI from a value-chain perspective. It’s not just about creating large language models. On the back end, you need infrastructure. The enablers are really the front end of the supply chain. That can include building physical infrastructure, chips in data centres and power. It’s not just software or the tools people see and use every day.
ANDREW: What about the big names we think of as AI plays — Alphabet, Meta, even Amazon, given how much AI capacity the cloud will require?
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