Enthusiasm about artificial intelligence (AI) has driven substantial gains in the stock market this year, and it certainly has investors' attention. The technology is still in the early stages of its development, but Wall Street's estimates about its long-term potential are staggering.

Goldman Sachs predicts AI could add $7 trillion to global economic output over the next decade, thanks to its ability to increase productivity. The bank has analyzed the prior productivity booms that were driven by electricity and information technology, and it says they have been preceded by massive investment cycles.

Based on its analysis, Goldman Sachs thinks businesses will spend $200 billion on hardware and software per year by 2025 to lay the groundwork for AI. That's more than double what they spent on AI in 2022! Many companies will be on the receiving end of that spending, but Nvidia (NASDAQ: NVDA) and Microsoft (NASDAQ: MSFT) might be the biggest winners. Here's why investors should buy shares in both of them. 

Continue reading

Source Fool.com