Digital Economy: ‘AI is a growth engine’
Despite high stock market valuations, René Nicolodi believes the digital economy is a promising investment theme. The Head Equity & Themes at the Asset Management of Zürcher Kantonalbank identifies the sectors that could benefit most.
Interview mit Dr René Nicolodi
Martin Spieler: Will the digital economy continue to grow at such an tremendous rate?
René Nicolodi: We are only at the beginning of a long-term trend. Digitalisation is a structural trend that affects all sectors of the economy and currently accounts for around 20% of global GDP. We will all need and use more and more data, computing power will increase and innovation will grow - so it is likely to be a stable long-term trend.
Artificial intelligence (AI) is a hot topic at the moment. To what extent will this future technology continue to drive the growth of the digital economy?
AI is clearly an additional driver of growth. Over the past year, we have seen it play out in the markets. The first wave was led by infrastructure and chip manufacturers such as the US company Nvidia. In a second wave, software companies that offer solutions related to AI could now benefit.
Which industries and companies are benefiting from the trend towards digitalisation?
Certainly the IT sector, which provides the essential infrastructure for digitalisation and drives innovation. But the healthcare sector, for example, could also benefit from digitalisation and AI in both drug development and diagnostics. Meanwhile, the need for data protection is increasing dramatically in the software sector, where the focus is on cybersecurity.
You mentioned the important areas of medicine and research - what specific potential does the digital economy offer here?
One of the trends in healthcare is that, in addition to treating symptoms, there is an increasing focus on prevention. In diagnostics, as I mentioned, the use of digitalisation, data and, above all, AI is important for creating disease profiles and identifying better treatments. In everyday life, we see that the trend towards fitness and well-being gives technology and the use of data for personalised applications a very important role.
The prices of technology stocks have already risen sharply, and the stocks are valued handsomely. Are there further opportunities for returns?
High expectations in the stock market always call for caution. This is especially true when efficiency gains and production increases are not so easy to achieve. At the same time, valuations are not as high as they were during the dotcom bubble of the 1990s. What's more, technology companies are highly profitable. We therefore expect relative strength across the sector, albeit with broader participation from many companies.
Innovative companies are often more risky. How can investors invest in the digital economy without taking excessive risks?
The digital economy is much more than just the IT sector. Rather, the investment theme offers broad diversification across a range of stocks, sectors and geographies. An active approach is particularly rewarding as the theme is highly dynamic and competitive - today's winners could be tomorrow's losers.
This interview was first broadcast in a slightly modified form on the programme 'Geld' on 24 January 2025 on Tele 1, Tele M1 and TVO.
Our thematic fund on the Digital Economy
Our thematic fund on the Digital Economy
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