FEW trends have captured the imagination of investors as quickly and fully as artificial intelligence (AI).

ChatGPT’s launch in late 2022 fuelled an enthusiasm for AI like no other, driving an estimated US$4 trillion surge in the value of global equities, according to our estimates. That’s equivalent to roughly the annual output of Japan – the world’s third-largest economy.

The top beneficiaries of the AI trend are now trading at around 25 times the 12-month forward earnings estimates versus around 18 times for global stocks, while the overall tech sector is trading at a near 32 per cent premium to its 10-year average.