Introducing the AI Ecosystem Index in Meritech Analytics
The AI industry is experiencing significant tailwinds. Companies across the AI value chain, from semiconductors and memory to networking and neoclouds, are capturing significant market share and growing revenue at unprecedented levels. Valuations are also up significantly (along with share price returns), and the industry has a cumulative market cap of over $12 trillion (vs. $2.3T for our software index).
Historically, our Meritech Analytics product has focused solely on public software companies. No longer. We’ve expanded Meritech Analytics to include the Meritech AI Ecosystem Index. It includes almost 60 companies across key segments such as AI Accelerators and Compute, Hyperscalers, Neoclouds, Servers, AI Infra EMS, Networking and Connectivity, Semiconductor Equipment and Manufacturing, and Memory and Storage.
AI Ecosystem Comps Now Available in Meritech Analytics
The chart below compares the total market cap from our software index vs the AI ecosystem index. Software is barely up since the launch of ChatGPT.
Software vs AI Ecosystem (Excl. Hyperscalers) Cumulative Market Cap ($B)
And no surprise, share price returns for the AI ecosystem index dramatically outpace software. The following chart shows the index returns of our software and AI ecosystem indices. The AI ecosystem index is up 422%, while software is up only 64%.
Software vs AI Ecosystem (Excl. Hyperscalers) — Indexed Stock Price Returns
The companies in the AI ecosystem are also much larger. Given the massive market sizes of this AI value chain, the outcomes are significantly higher in our AI ecosystem index — today they sit at a $31B median market cap vs. just $4B for our software index.
Software vs AI Ecosystem (Excl. Hyperscalers) Median Market Cap ($B)
While SaaS isn’t dead, the public markets have clearly rewarded the AI value chain over software since the launch of ChatGPT. We built the AI Ecosystem Index to give our audience the same depth of analysis on these companies that Meritech Analytics has provided for software. Explore the full index at MeritechAnalytics.com.