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LONDON (AP) False and misleading information supercharged with cutting-edge artificial intelligence that threatens to erode democracy and polarize society is the top immediate risk to the global economy, the World Economic Forum said in a report Wednesday.

In its latest Global Risks Report, the organization also said an array of environmental risks pose the biggest threats in the longer term. The report was released ahead of the annual elite gathering of CEOs and world leaders in the Swiss ski resort town of Davos and is based on a survey of nearly 1,500 experts, industry leaders and policymakers.

The report listed misinformation and disinformation as the most severe risk over the next two years, highlighting how rapid advances in technology also are creating new problems or making existing ones worse.

The authors worry that the boom in generative AI chatbots like ChatGPT means that creating sophisticated synthetic content that can be used to manipulate groups of people wont be limited any longer to those with specialized skills.

AI is set to be a hot topic next week at the Davos meetings, which are expected to be attended by tech company bosses including OpenAI CEO Sam Altman, Microsoft CEO Satya Nadella and AI industry players like Metas chief AI scientist, Yann LeCun.

AI-powered misinformation and disinformation is emerging as a risk just as a billions of people in a slew of countries, including large economies like the United States, Britain, Indonesia, India, Mexico, and Pakistan, are set to head to the polls this year and next, the report said.

You can leverage AI to do deepfakes and to really impact large groups, which really drives misinformation, said Carolina Klint, a risk management leader at Marsh, whose parent company Marsh McLennan co-authored the report with Zurich Insurance Group.

Societies could become further polarized as people find it harder to verify facts, she said. Fake information also could be used to fuel questions about the legitimacy of elected governments, which means that democratic processes could be eroded, and it would also drive societal polarization even further, Klint said.

The rise of AI brings a host of other risks, she said. It can empower malicious actors by making it easier to carry out cyberattacks, such as by automating phishing attempts or creating advanced malware.

With AI, you dont need to be the sharpest tool in the shed to be a malicious actor, Klint said.

It can even poison data that is scraped off the internet to train other AI systems, which is incredibly difficult to reverse and could result in further embedding biases into AI models, she said.

The other big global concern for respondents of the risk survey centered around climate change.

Following disinformation and misinformation, extreme weather is the second-most-pressing short-term risk.

In the long term defined as 10 years extreme weather was described as the No. 1 threat, followed by four other environmental-related risks: critical change to Earth systems; biodiversity loss and ecosystem collapse; and natural resource shortages.

We could be pushed past that irreversible climate change tipping point over the next decade as the Earths systems undergo long-term changes, Klint said.

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AI-powered misinformation is the world's biggest short-term threat, Davos report says - The Associated Press

While 2023 saw some artificial intelligence (AI) companies skyrocket, there will be plenty more that see their stocks rise in 2024. One of the critical industries to watch is cloud computing, as these servers are needed for two reasons. First, they can provide the impressive computing power needed to create AI models. Second, these servers can also store the massive amount of data needed to feed these models.

Two of the biggest players in this space are Amazon (AMZN -0.36%) and Alphabet (GOOG 0.40%) (GOOGL 0.40%). While each stock had a strong 2023, the tailwinds provided by their exposure to cloud computing will push them much higher in 2024.

Amazon last split its stock in June 2022, when each share turned into 20. With the stock trading around $145, we're likely a long way off from another stock split, but after a strong year, management may consider it.

While many know Amazon from its e-commerce business, it has become more of a service investment in the past five years. Among these services is Amazon Web Services (AWS), its cloud computing offering. AWS currently has the largest cloud computing market share, controlling an estimated 32% of the market (compared to Alphabet's Google Cloud's 11% and Microsoft Azure's 22%), according to Synergy Research Group.

As of late, AWS has been losing market share, as it hasn't posted great results in 2023. On a currency-neutral basis, AWS' last four quarters of growth rates looked like this:

Data source: Amazon. Table by author.

Compared to its chief rivals, which have consistently posted growth rates above 20% in 2023, AWS is being left behind. But that could change in 2024.

On its Q3 conference call, management discussed the cause of the slowdown: workload optimization. Customers were inefficient in their AWS usage, so instead of risking losing clients to competitors, Amazon stepped in to help optimize spending, which caused growth headwinds.

However, management has evidence that this trend is nearly wrapped up, as they signed deals effective in October that were equivalent to all the deals signed throughout Q3. With new AI workloads coming online, AWS is slated to have a strong 2024.

AWS is one of the most profitable parts of Amazon's business, as it posted 30% operating profit margins in Q3. Should AWS have significant growth in 2023, this will drastically help Amazon's profits, setting the stock up to have a great 2024.

Alphabet also split its stock 20 for one, about the same timeframe as Amazon in July 2022.

While Alphabet's Google Cloud experienced the same slowdowns in 2023, it was not as affected as Amazon. Furthermore, the Google Cloud division is highly leveraged to AI workloads, as over half of generative AI start-ups are Google Cloud customers. With Google Cloud growing at a 22% pace, it's doing quite well.

However, it's not optimized for profits quite yet. Alphabet was a bit late to the cloud computing market, so it hasn't had time to become massively profitable (like AWS). In Q3, Google Cloud posted an operating margin of 3.2% -- a far cry from AWS' 30% margin.

Should Google Cloud achieve the same 30% margin as AWS, it would add 12% to Alphabet's total operating profits. That's a solid gain just by optimizing for profits, but don't expect management to do that in 2024. They see a massive market opportunity, and with Google Cloud growing at a 20% or greater pace throughout 2024, this effect will compound over time.

Even with that boost in its back pocket, Alphabet trades at a reasonable price.

GOOGL PE Ratio (Forward) data by YCharts

With Alphabet having other AI investments, like its groundbreaking Gemini generative AI model, it's set up to have a strong 2024, making it a great candidate for a stock that can crush the market in 2024.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fools board of directors. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fools board of directors. Keithen Drury has positions in Alphabet and Amazon. The Motley Fool has positions in and recommends Alphabet, Amazon, and Microsoft. The Motley Fool has a disclosure policy.

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2 Stock-Split Artificial Intelligence (AI) Stocks That Could Skyrocket in 2024 - The Motley Fool

The AI revolution may exert pressure on governments to enact new social safety nets to protect people who lose their jobs but are unable to upskill themselves, warns the head of the International Monetary Fund (IMF).

"If we don't have thoughtful distribution of benefits [of AI] and inequality grows dramatically, that can break the social fabric in a way that is going to be very unhealthy for the world," IMF managing director Kristalina Georgieva tells Yahoo Finance Live. "Social safety nets in a world of artificial intelligence are paramount."

Georgieva's comments come amid the release of an extensive IMF study on the global economic impact of AI's proliferation on Sunday. The findings coincide with the 2024 World Economic Forum in Davos, Switzerland, where AI will be a hot topic amongst high-profile tech attendees such as Microsoft (MSFT) co-founder Bill Gates, OpenAI's Sam Altman, and Salesforce (CRM) CEO Marc Benioff.

Those social safety nets may need a hefty amount of funds, if the IMF's findings are any indication.

About 40% of global employment is exposed to AI, according to the IMF. In advanced economies, roughly 60% of jobs are exposed to AI due to the prevalence of "cognitive task" oriented jobs. Overall exposure is 40% in emerging markets and 26% in low-income countries, says the IMF.

Although many emerging markets and developing economies may experience less immediate AI-related disruption, the IMF reasons they are also ready to capitalize on AI's advantages. This could "exacerbate" the "digital divide" and "cross-country income disparity," the study concludes.

Georgieva thinks the elderly could see an outsized impact from AI's widespread adoption and be in need of a social safety net.

"You have to be able to support those that fall off a cliff because their jobs are wiped out. We also look at who are most adaptable. Obviously the younger generation, in some areas, women more adaptable, but in others less. And the older generation may need more support to catch up in this new world," Georgieva adds.

Story continues

The IMF isn't a singular voice on possible economic aftershocks from AI.

In research of its own in 2023, Goldman Sachs economists found that advances in AI could expose the equivalent of 300 million full-time jobs globally to automation. In other words, job loss.

Goldman's economists projected that roughly two-thirds of US occupations are exposed to some degree of automation by AI.

Look no further than the news industry as a prime example of what the IMF and Goldman are discussing.

Large language models (LLMs) are well down the path of ingesting news and information and spewing it out to the global masses, lessening the need to visit a website. Media organizations, meantime, have moved to automate some functions of newsrooms to increase content quantity and slash costs.

News Corporation CEO Robert Thomson (NWSA) told Yahoo Finance Live in late 2023 that AI will be "epochal" for news.

Thomson went onto warn that the industry could face a "tsunami potentially of job losses" due to the new tech.

"These are not just jobs lost, it's insights lost. So it's important that all media companies understand the impact, but also, it's incumbent on the big AI players to understand their impact," Thomson added.

Davos 2024

Brian Sozzi is Yahoo Finance's Executive Editor. Follow Sozzi on Twitter/X @BrianSozzi and on LinkedIn. Tips on deals, mergers, activist situations, or anything else? Email brian.sozzi@yahoofinance.com.

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IMF managing director on AI's impact: New social safety nets may be needed - Yahoo Finance

The Nasdaq-100 Technology Sector index was in fine form last year with impressive gains of 67%. This was driven by a terrific surge in tech stocks that found favor with investors once again on the back of cooling inflation, the pause in the Federal Reserve's rate hikes, and new catalysts such as artificial intelligence (AI).

A closer look at past trends indicates that the Nasdaq-100 could have another stellar year in 2024. Since its inception in 1985, the Nasdaq-100 has seen only seven down years. What's more, the index has tended to bounce back impressively in the two years following a down year. For example, it jumped 53% in 2009 and 19% in 2010 following a sharp decline of 42% in 2008.

We have already seen that the index soared impressively last year, and that followed a steep drop of 33% in 2022. While past events can't always tell us how the future may pan out, there are indications that the Nasdaq could keep surging in 2024. For instance, the Federal Reserve is expected to cut interest rates this year on account of cooling inflation.

At the same time, tech stocks can get a boost thanks to the potential growth in the smartphone and personal computer (PC) markets, as well as the surging demand for AI chips. That's why now would be a good time for investors to put their money into shares of Micron Technology (MU -1.20%), a Nasdaq stock that's trading at attractive levels now and that could go on a terrific bull run in 2024 thanks to AI.

AI is going to play a major role in helping Micron Technology return to growth in the current fiscal year, following a disappointing performance in the last one. The memory specialist's revenue fell by half in fiscal 2023 (which ended in August last year) to $15.5 billion, while it swung to a non-GAAP loss of $4.45 per share, compared to a profit of $8.35 per share in the prior year.

However, the memory market's oversupply has ended, driven mainly by the growing demand for memory chips being deployed in AI applications. For instance, Micron's peer SK Hynix estimates that the demand for high-bandwidth memory (HBM) chips, which are deployed in AI servers, could increase at an impressive annual rate of 82% through 2027. Samsung has also seen its orders for HBM double in 2023.

The good news is that Micron is all set to capitalize on the fast-growing HBM opportunity with the help of Nvidia. Micron management recently pointed out that its latest generation of HBM chips is in the final stages of qualification for Nvidia's GH200 Grace Hopper Superchip and the upcoming H200 AI graphics processing unit (GPU), which are set for launch this year.

Nvidia's H200 GPU is set to be equipped with HBM3e. The chipmaker points out that this memory chip will increase the memory bandwidth of its upcoming AI GPU by 43% to 4.8 terabytes per second, compared to the current-generation H100 processor. What's more, Nvidia is upgrading the memory capacity of the H200 to 141GB (gigabytes) from 80GB on the existing H100 processor.

Given that Nvidia is expected to boost the supply of its AI GPUs significantly this year, it's not surprising that reports suggest that it has made a large prepayment to Micron for HBM chips. Citing industry sources, Taiwan-based daily newspaper DigiTimes says that Nvidia has reportedly made an advance worth $770 million to Micron to secure HBM supply.

So, it's likely we'll see Nvidia moving the needle in a significant way for Micron this year. However, that's just one way in which AI could positively affect the company's growth. AI deployment in edge devices such as PCs and smartphones is expected to drive higher memory consumption as well.

According to market research firm Counterpoint Research, sales of generative AI-powered smartphones could hit 100 million units in 2024. The firm estimates that this market could clock annual growth of 83% through 2027, with a cumulative 1 billion generative AI-enabled smartphones expected to be sold over the next five years. Not surprisingly, Micron management expects "smartphone OEMs to start ramping AI-enabled smartphones in 2024, with an additional capacity of 4 to 8GB of DRAM per unit."

Micron expects a similar trend to unfold in the PC market. The chipmaker is anticipating manufacturers will start ramping up the production of AI-enabled PCs in the second half of 2024. Micron says that these AI-powered PCs are likely to be equipped with an "additional capacity of 4 to 8GB of DRAM per unit," while their storage capacities should increase as well.

This is another key growth opportunity for Micron, given how rapidly the market for AI-powered PCs is expected to grow.

All this tells us why Micron's revenue is expected to grow an impressive 48% in the current fiscal year to $23 billion.

MU Revenue Estimates for Current Fiscal Year data by YCharts

The company's loss is expected to shrink to just $0.39 per share in the current fiscal year, followed by a significant jump in profit in fiscal 2025 to $6.49 per share. Assuming Micron does hit Wall Street's earnings target over the next year, its stock price could jump to $181 based on the Nasdaq-100's forward earnings multiple of 28 (using the index as a proxy for tech stocks). That would be a 115% increase from current levels.

It's worth noting that Micron stock is trading at less than 13 times forward earnings. This makes it cheaper than Nvidia, which has nearly double the forward earnings multiple.

MU PE Ratio (Forward 1y) data by YCharts

Micron's price-to-sales ratio of 5.6 is also much lower than Nvidia's multiple of 26. As such, investors looking for an AI stock are getting a good deal on shares of Micron Technology right now, and they should consider grabbing this opportunity with both hands before the stock soars higher.

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History Suggests the Nasdaq Could Surge in 2024: A Magnificent Artificial Intelligence (AI) Stock to Buy Hand Over Fist ... - The Motley Fool

Palantir Technologies (PLTR 0.48%) is a recognized leader among artificial intelligence (AI) and machine learning platform providers, and the company is leaning into that functionality. Palantir recently reworked its go-to-market strategy to drive adoption of its Artificial Intelligence Platform (AIP), a new product that brings support for generative AI to its existing data analytics platforms.

Management sees tremendous upside in AIP, as does Wedbush Securities analyst Dan Ives. In fact, Ives has called Palantir "the gold standard in AI," explaining that its ability to monetize AI on both the government and enterprise sides makes it the "best pure play" option in the space. And the market is no less bullish. Palantir stock rocketed about 150% higher over the past year.

However, Wall Street remains largely skeptical where Palantir is concerned. The stock has a consensus "sell" rating among analysts, and its median 12-month price target of $14.50 per share implies 10% downside from its current price. For comparison, Wall Street is quite bullish on a lesser known AI stock: HubSpot (HUBS -1.57%).

Wall Street currently has a median 12-month price target of $600 per share on HubSpot stock, implying 12% upside from its current price. The stock also carries a consensus "buy" rating. In fact, not one analyst recommends selling shares of HubSpot at the present time.

Here's what investors should know.

HubSpot specializes in customer relationship management (CRM) software. Its platform includes applications that improve productivity across sales, customer service, marketing, and operations teams. HubSpot has cultivated a particularly strong presence among small and medium-sized businesses due to its freemium pricing strategy, tiered product portfolio, and focus on simplicity.

Indeed, that strategy has been so effective that research company G2 ranked HubSpot as the best global software seller across any category in 2023. That commendation not only reflects a strong market presence, but also high user satisfaction scores. HubSpot is also a recognized leader in marketing automation software and artificial intelligence (AI) sales assistant software among small businesses, and the company is leaning into that expertise.

Specifically, HubSpot recently announced HubSpot AI, a suite of AI-enabled tools that automate tasks and surface predictive insights across the CRM platform. For instance, it can draft emails and predict future sales, write social media copy and create marketing content, and prioritize and respond to customer service requests. HubSpot AI can even automate the construction of websites. The company also launched ChatSpot, a generative AI assistant that lets users engage the CRM platform with natural language.

HubSpot reported strong financial results in the third quarter. Revenue climbed 26% to $558 million on a 22% increase in customers and a 3% increase in subscription revenue per customer. Even more impressive, non-GAAP net income soared 138% to $83 million as its operating margin expanded seven percentage points due to cost control efforts.

HubSpot has innovated quickly over the past year, something stakeholders have come to expect from the company. Of particular note, HubSpot added new features to Sales Hub in the third quarter, including new prospecting and deal management solutions. Those upgrades should help the company win more large customers.

To add detail to that, Sales Hub is a suite of productivity tools that are designed to improve outcomes across the sales lifecycle, from generating leads to closing deals. HubSpot aims to draw larger businesses to its platform to expand its addressable opportunity, which management currently values at $51 billion.

The company is pursuing that goal by adding more sophisticated features to its CRM applications. While still early, that strategy has merit. CEO Yamini Rangan noted "pretty significant traction" with new Sales Hub features in the third quarter.

Additionally, the introduction of HubSpot AI positions the company to benefit from growing demand for automation in the CRM market. Management says 40% of enterprise customers have already used HubSpot AI features.

That early momentum is particularly encouraging because generative AI spending within the CRM space is forecast to increase at 21% annually through 2032. For context, the broader CRM software market is projected to expand at 14% annually through 2030.

Ultimately, HubSpot should achieve above-average revenue growth as it continues to push upmarket and lean into generative AI, helped along by its leadership position in marketing automation and AI sales assistant software.

Indeed, analysts at Morningstar expect revenue to increase at 21% annually over the next five years. Investors can reasonably expect a similar growth trajectory through the end of the decade. In that context, its current valuation of 13.3 times sales appears reasonable, especially when the three-year average is 16.6 times sales.

Patient investors should feel comfortable buying a small position in this growth stock today. But the key word is "patient". There is no guarantee HubSpot shareholders will turn a profit over the next 12 months, regardless of Wall Street's price target.

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1 Artificial Intelligence (AI) Growth Stock With More Upside Than Palantir to Buy Now, According to Wall Street - The Motley Fool