Artificial intelligence: What is it, and why are companies adopting it?

Predictive analytics is transforming large data sets into actionable items

Time to read: 3 min

Technology companies are known for innovation, and it doesn’t take long for a revolutionary new technology to take hold and become a part of people’s daily lives. In my view, investors shouldn’t be threatened by technology. Rather, they should be skeptical of companies not utilizing technology to its fullest potential.

One common theme we find when considering the largest companies within the Nasdaq-100 Index is the early embrace of artificial intelligence (AI). Even the chief executive officer of Alphabet (the parent company of Google) acknowledged the importance of artificial intelligence in the company’s first quarter 2016 earnings call.1 While not all companies


From bricks to clicks: The shifting sands of retailing

The advent of online retailing has created a new class of companies that can effectively leverage technology

Time to read: 3 min

With the holiday season upon us, retail companies are trying to close out the year on a strong note after a rough stretch. So far in 2017, more than 6,700 store closings have been announced in the United States — more than in any year on record.1 Although these numbers may sound dire, traditional retailing isn’t dead yet. Rather, the nature of retailing has simply shifted.

Black Friday and Cyber Monday as a barometer of retailing trends


Is equity market volatility due for a comeback?

Barring geopolitical disruptions, there is little evidence that volatility will make an extended return

Time to read: 2 min

Equity market volatility has been remarkably low in recent years, which has corresponded to strong large-company equity performance — particularly for the Nasdaq-100 Index and the S&P 500 Index. This has led some market observers to wonder whether we’re due for a correction of sorts in volatility, much as stocks might correct after a bull market. Barring major geopolitical disruptions, I don’t see evidence that this will be the case.

The CBOE NASDAQ Volatility Index (the VXN) is the Nasdaq-100’s version of the CBOE Volatility Index (the VIX), which measures the volatility of the S&P 500 Index and is perhaps the most commonly cited barometer of near-term equity market volatility. The VXN reflects


Are the ‘Power Five’ stocks creating another bubble?

Comparisons to the 1990s tech bubble can be misleading

Technology has been the best-performing sector of the S&P 500 Index in 2017. As such, some investors are drawing comparisons between today’s technology bull market and the infamous dot-com bubble of the late 1990s, which reached its peak in March 2000.1 Both then and now, technology stocks were catalysts behind major market rallies.

But that’s where the similarities end, in my view. While technology has delivered the best sector performance within the S&P 500 Index over the past three years (July 29, 2014, through June 29, 2017), we are still nowhere near the bubble status of 17 years ago.1

As evidence, consider the five largest publicly traded stocks in the United States: Apple, Alphabet (the parent company of Google), Microsoft, Amazon and Facebook. These are referred to by various acronyms, such as FAANG or FAAMG, but for our purposes we will collectively call this group of technology titans the “Power Five.”

That was then, this is now