Signal over Noise: What history tells us about the next market leaders
5/31/20266 min
Every technology shift redraws the market leaderboard. From mainframe to PC, to internet and mobile, history shows it is not only about what stocks to own, but also what stocks not to own. Incumbents rarely win the next era, while profits shift to platforms and networks built on top of the hardware layer. In AI, companies fastest to reach platform mode, combining intelligence and application layers, are likely to define the next generation of market leaders.
Transcript preview
First 90 secondsUlrike Hoffmann-Burchardi· Host0:00
Hello and welcome to Signal Over Noise. I'm Ulrike Hoffmann-Bojardi, CIO for the Americas and Global Head of Equities for UBS Wealth Management. There is nothing new under the sun. One of the key pieces of market wisdom I learned from my former boss, Paul Tudor Jones. The past is often the best starting point to understand the future. We are in the middle of a technology shift to AI. History shows that every shift has redrawn the leaderboard in the market. The shift from mainframe to PC, the shift from PC to internet, and the shift from internet to mobile. In these shifts, it's not only about what stocks to own, but also what stocks not to own, and history shows this. Let's travel back to the nineteen seventies. Mainframe computing was a centralized industrial resource. It occupied an entire climate-controlled room. The undisputed leader of this era was IBM. IBM sold the hardware, the software, and the services, a closed ecosystem with industry-leading margins. It was the most valuable company from the nineteen sixties onwards, and the first to reach a hundred billion in market cap in nineteen eighty-seven. Then came the microprocessor. It was invented by Intel in 1971, compressing the computing power of a central processor onto a single silicon chip. IBM underestimated this transition. When IBM finally built their own PC, it outsourced the two most critical