AI will power the stock market for the next decade, former Cisco CEO says

Former Cisco CEO John Chambers told CNBC on Wednesday that artificial intelligence will power the stock market over the next decade.

Chambers, who is also the founder and CEO of JC2 Ventures, stated that AI will not only select the winners and losers in the tech sector, but that shares tied to the technology will likely exceed non-AI stocks by three to one in terms of returns.

“AI will power the stock market for the next decade,” Chambers told CNBC’s Karen Tso on the sidelines of the VivaTech event in Paris.

“I think the overall question if you’re an investor and you an invest in a portfolio of AI stocks, and [if] you did it consistently over the next five to 10 years, you’re going to do very well.”

According to Chambers, 38% of venture capital in the United States was invested in AI stocks during the first quarter. He expects that to rise to “way over” 50%, estimating that 12% of venture capital poured into AI stocks in Europe during the first quarter.

Nvidia, an AI chipmaker, has seen its shares increase fivefold since the end of 2022 and more than doubled in 2023. The surge in demand for AI-related products has driven much of the company’s upswing.

Chambers contrasted Nvidia’s dominance in the AI field to Cisco’s position in the internet sector. “If you watch Nvidia’s sales, that’s going to be very indicative of what’s occurring overall,” he stated.

Maurice Lévy, chairman of Publicis, stated that an AI “transformation” will occur, as the technology surely kills some employment while creating more value-added positions.

“We don’t expect to see a net negative, but rather a net positive,” Lévy told CNBC on Wednesday. “And the companies that will adopt AI, the earlier they will do it, the more they will grow, and the more they will create jobs with really some great added value.”

The S&P 500 and Nasdaq Composite reached new highs on Tuesday, as investors awaited Nvidia earnings. The Nasdaq Composite has risen by almost 12% this year.

“AI is the reason the stock market has moved so dramatically in the last 12 months,” Chambers stated. “The European stocks and FTSE were slower to move, but they’ve been positive the last six months.”

“I believe AI will be like the internet, but three to five times more powerful. It will transform your life in every aspect.

Karen Gilchrist contributed to this story.