Explore This Promising FTSE 100 AI-Linked Stock for Your Stocks and Shares ISA Investment
As we look towards 2025, the potential for significant growth in Stocks and Shares ISAs is increasing, driven by advancements in artificial intelligence (AI). A recent report forecasts an impressive GDP growth of up to 5.4%, a figure that exceeds many of the most prosperous years in the past century. In contrast, developed nations currently experience annual growth rates of less than 1%.
The rise of AI brings transformative prospects alongside potential challenges. The technology could streamline operations, possibly reducing the number of jobs needed in various sectors. However, this shift may also result in higher stock market returns than we’ve experienced in recent years. Such growth could enhance the value of Stocks and Shares ISAs, providing advantages like passive income and opportunities for early retirement.
The Current State of Artificial Intelligence
Currently, artificial intelligence occupies an intriguing position within our society. Although its capabilities are reminiscent of science fiction, the full extent of its practical applications remains to be seen. This scenario parallels the early internet era, where the concept of global communication foreshadowed its later transformative effects.
For instance, consider the ride-hailing giant, Uber, valued at $200 billion. During the early days of the internet, few could have imagined how such technology would allow a simple app to summon a taxi within moments.
Despite the excitement surrounding AI, one must acknowledge the absence of guarantees. Initial ventures into leveraging AI for economic growth may not yield fruitful results. There is a possibility that the anticipated golden age of AI may not materialize as some expect.
Investment Opportunities in AI-Driven Pharma
Among the sectors aiming to harness AI’s potential is the pharmaceutical industry, with companies like AstraZeneca (LSE: AZN) in focus. The premise is that AI can analyze vast datasets, potentially leading to new drug discoveries.
Several AI-identified drugs are currently in clinical trials, although AstraZeneca’s market valuation has not seen significant changes—the company trades at 29 times earnings, consistent with its previous valuations. This suggests that AI may not be the transformative force some investors had hoped for.
However, like any pharmaceutical firm, AstraZeneca’s success hinges on the efficacy of its treatments. A slowdown in new drug discoveries poses a consistent risk to its stock.
Notwithstanding these challenges, AstraZeneca has several commendable aspects. Under the leadership of CEO Pascal Soriot, the company has seen its share price quintuple since 2012. Furthermore, it boasts a robust research and development pipeline, with substantial investments directed towards hundreds of innovative therapies. Given these factors, AstraZeneca merits consideration within a Stocks and Shares ISA portfolio.
