AI will power the stock market for the next decade, says former Cisco CEO

Artificial intelligence will power the stock market for the next decade, former Cisco CEO John Chambers told CNBC on Wednesday.

Chambers, who is also the founder and CEO of JC2 Ventures, said that AI will not only determine the winners and losers of the tech sector, but that tech-related stocks are likely to outperform non-AI stocks by about 3 to one. in returns.

“AI will power the stock market for the next decade,” Chambers told CNBC’s Karen Tso on the sidelines of the VivaTech conference in Paris.

“I think the general question if you’re an investor and you invest in a portfolio of AI stocks, and [if] you’ve done that consistently over the next five to 10 years, you’re going to do really well.”

Chambers said 38% of US venture capital in the first quarter went into AI stocks. He expects that to grow to “more than” 50%, while estimating that 12% of venture capital went into AI stocks in Europe during the first quarter.

AI chip maker Nvidia has seen its stock quintuple since the end of 2022. after more than doubling in 2023. Soaring demand for AI-related products has fueled much of the firm’s growth.

Chambers compared Nvidia’s place in the AI ​​market to Cisco’s in the internet market. “If you look at Nvidia’s sales, that’s going to be very indicative of what’s going on overall,” he said.

Maurice Lévy, chairman of Publicis, pointed out that an AI “transformation” will occur, as the technology will undoubtedly eliminate some jobs, while at the same time creating more value-added roles.

“We don’t expect to see a net negative, we expect to see a net positive,” Lévy told CNBC on Wednesday. “And the companies that will adopt AI, the earlier they do it, the more they will grow and the more they will create jobs with a really big added value.”

of S&P 500 AND Nasdaq Composite rose to new record highs on Tuesday as investors await earnings from Nvidia. The Nasdaq Composite is up about 12% this year.

“THIS is the reason the stock market has moved so dramatically in the last 12 months,” Chambers said. “European shares and the FTSE were slower movers, but they have been positive over the past six months.”

“I think AI will be like the Internet, except three to five times more powerful. It will change your life in every way.”

– Karen Gilchrist contributed to this report.