Within the framework of the traditional Navy Pier de Chicago, the Morningstar Investment Conference (Mic) 2025 where the latest investigations and analysis of the experts of the financial company and the perspectives of the opinion leaders of the industry that, according to Frank Lee, arrived at the conclusion that the Artificial Intelligence (AI) and the transition from infrastructure to the cloud remain the key trends between the technological actions.
In addition, they agreed that on the side of public services actions the keys go through the improvement of infrastructure and supply chain. Of course they also highlighted the Perspectives of the Defense Sector that focus on increasing global spending on military R&D and in the purchase of existing inventories. So that the current context for stock investment shows how the rise of artificial intelligence extends beyond technological actions, together with an important geopolitical agitation.
In MIC 2025, the Senior of Variable Income of Morningstar, Dan Romanoff, the Strata Travis Miller and the Variable Rental Analyst Nicholas Owens They offered their prospects on the main trends in the technology, public services and defense sectors; But they also debated What actions are better positioned to benefit from these trends in the coming years. Which ones mentioned?
Artificial intelligence actions will continue to take the lead
Lee points out that, on the side of the technological sector, Romanoff focused on AI as the dominant force: “At this time, it is promoting everyone’s growth, and I think it will accelerate in the next two or three years, once its adoption is generalized.” Along with this, he highlighted the ongoing transition of the delivery of local data to the delivery in the cloud: “Investors, of course, they love the different cash margins and the resulting stability, compared to what used to fluctuate quarter to quarter in a single important operation.” In this sense, Romanoff stands out Two actions with competitive advantages.
- Amazon: They are leaders in the public cloud. If we analyze its service offer within AWS, they have offered a service called AI and automatic learning for 15 years. This is not new for Amazon, but the generative AI is. They are very well positioned; They are already benefiting greatly. They already generate billions of dollars in annual income for being the largest public cloud supplier. They will benefit greatly.
- MicrosofT: They have migrated their business to a subscription based. They are the second major cloud service provider after AWS, with Microsoft Azure. Therefore, they benefit disproportionately because they already have all these business relationships. And still maintain all those monopoly positions in areas such as Windows and Office.
The panorama in public sector actions
As for the public services sector, Lee says that Miller highlighted the important gap between supply and energy demand: “The idea of this adjustment of supply and demand (not only the absolute amount of demand, but the close relationship between the generation and demand for electricity) is that supply and demand is reduced.” In this regard, He highlighted two actions with more experience in infrastructure construction and optimization of the supply chain to cover the gap in the offer.
- International Edison: You have to build a lot of distribution. That implies that many companies are building infrastructure. Edison plans to invest US $ 8,000 million a year over the next 10 years. They will invest a considerable amount of money that will boost a great growth of profits.
- EVERSORCE ENERGY: Enterious is the largest public services company in Northeast (Connecticut, Massachusetts, New Hampshire). Again, it is infrastructure, especially interstate transmission. So you can transport any type of clean energy, for example, from the north of the state of New York, where there is less demand, to Massachusetts, and even possibly to Boston or Connecticut. That is the great challenge and the great opportunity.
WHAT DOES THE ACTIONS LIKED TO THE DEFENSE
On the so promoted defense sector in the geopolitical news, That it would be the third great trend, Lee points out that Owens made a key difference between this industry and many other market sectors: “The defense industry does not move to the rhythm of the economy as most of the actions. Actually, it is driven by military spending, which in turn depends, say, on the perception of the world geopolitical risk.
I doubt if calling it a Mega-theity or not, but what is observed is the growth rate of military spending worldwide. This is mainly due to US defense budgets, but now also, more and more, to those of Europe. ”
Thus Owens stood out Two undervalued actions That, in their opinion, they are well positioned for these geopolitical tendencies: Huntington Ingalls Industries and General Dynamics. Owens explained that Huntington is practically a monopoly; His entire business focuses on naval construction while General Dynamics has a significant part of his business in the same sector. Both produce nuclear submarines and, in essence, collaborate in the production of nuclear submarines and destroyers. Huntington is the only company that manufactures aircraft carrier, resumed them and reequipa.
Investment trends: what is coming
After the MIC 2025 Lee thus summarizes the investment thesis: “The investor who seeks value in the medium term cannot ignore these three trends. They are not tactical bets, but background winds with the ability to transform entire sectors. ”In a high dispersion environment and multiple macroeconomic uncertainties, the key is to identify companies that not only survive the change, but lead it, that is why Lee recommends more than choosing between growth or value, it is about betting on the companies that are in the center of the new economic cycle.
Morningstar -amazon’s six proposals, Microsoft, Edison, Esversource, Huntington and Ingalls – share an essential characteristic: They are not speculative fashions. “They are companies with solid business models, clear competitive advantages and aligned with mega-tendencies that have come to stay,” says Lee.
Source: Ambito
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