Q: Hi: it’s obvious that AI has boosted the market to new heights. My hypothetical question is, if AI was taken out of the equation, how well has the market performed over the last several years?
5i Research Answer:
The economy and markets would certainly be a bit more sluggish but a case can be made that the funds going into AI would have found or needed something else to go into. So, the absence of AI doesn't necessarily mean the absence of investing in the economy. There were already tailwinds for the idea of onshoring, and the urgency of AI/Robotics has likely just accelerated this trend. But certainly if we took out the performance of the Mag 7 stocks and other AI stocks in the indices performance over the past five years certainly would be more muted, but still 'decent'.