Man GLG’s Andrew Swan says technology hardware companies the next winners from AI

Consumers are likely to see a lot more AI in latest technology products as companies look to turn the tides of sluggish demand, helping create a bunch of winners.

Companies will increasingly use artificial intelligence to stimulate sluggish consumer demand as market watchers say the world is on the cusp of seeing a new cycle in consumer electronic products.

Man GLG Asia Opportunities Fund portfolio manager Andrew Swan said the next big beneficiaries of AI over the next 12 months will be technology hardware companies, after 2023 sparked a euphoria for processing chip maker Nvidia and also the mega technology stocks in the US.

Sales of mobile phones have been slowing in recent years as consumers hold onto devices for a longer period of time as technology advances have not been nearly as revolutionary as in the past.

Mr Swan said at a media briefing markets were now on the cusp of seeing the halo effect of AI flow to downstream providers who will look to incorporate AI into devices.

“A lot of companies are trying to stimulate consumer demand for products by incorporating more AI into devices and putting AI on your device, like learning models on your device, which actually gives you things stored on your device rather than in the cloud,” he said.

“You’re going to see a lot more AI functions in your phones, in your iPads, in your laptops and in your PCs.”

Samsung has introduced AI into its new line of smartphones. Picture: Jung Yeon-je

Samsung this month released its new Galaxy S24 range which uses both on-device and cloud-based AI to perform tasks from photo editing to live translation, transcription and summarising context.

Other phone makers such as Google are reportedly looking to include AI features in upcoming phone releases scheduled this year.

Mr Swan said features in the new Samsung phone such as instant translations were the sorts of things common with day one of new technology.

“When you see a steep change in technology, innovation is hard to see what exactly it looks like down the road, but you know things are happening,” he said.

“And when you see this changing technology, you tend to see a lot of innovation that drives demand in what has been a fairly weak demand environment for consumer electronic products.”

He added technology hardware offered the next big opportunity, along with Asia, which has been a beneficiary of AI, particularly in the semiconductor hotspot of Taiwan, but also further downstream.

“That’s really where the opportunity is,” he said. “There’s still fantastic demand upstream, but it’s now going to start filtering innovation downstream, and that’s where Google brought our sort of implications for places like Korea and Taiwan, which are very tech-focused.”

Investors have flocked into companies exposed to AI in the past year, with shares in Nvidia up 210 per cent over the period, with Microsoft lifting 63 per cent.