“In recent years we’ve witnessed a number of investing fads: From meme stocks to cannabis to Web 3. As each narrative has cooled, theses have drifted and fleet-footed capital has pivoted back to safety…or on to the next,” they wrote in a Thursday research note. “Yet, something suggests the AI hype is worth considering seriously…product market fit.”

The strategists argued that AI is a “serious contender” for the “key theme” of 2023 because the technology will be used across multiple industries and both consumers and businesses have shown willingness to quickly adopt it.

Investors’ recent AI fervor began last month, when Microsoft revealed its $10 billion investment in the red-hot startup OpenAI, the creator of the trendy AI chatbot ChatGPT, which reached 1 million users and 100 million site views faster than any other platform in history. Then came the big news that Microsoft plans to use OpenAI’s tech in its Bing search engine, ramping up competition with its Big Tech rival, Google.

“This technology is going to reshape pretty much every software category,” Microsoft CEO Satya Nadella said Tuesday at a presentation from the company’s executive briefing center in Redmond, Washington. 

“We’re going to reimagine the search engine, the web browser, and new chat experiences,” Yusuf Mehdi, Microsoft’s corporate vice president and consumer chief marketing officer, added.

Google responded to Microsoft’s ChatGPT push this week with its own AI chatbot, Bard, which is powered by the advanced language model LaMDA. But the release was overshadowed by errors in the very first technological demonstration that helped slash $100 billion from Google’s market cap.

Still, analysts say Big Tech’s AI releases have helped bring the ongoing “AI arms race” to the public’s attention. AI tech is finding its place, not just search engines, but also in finance, video games, and even art, they say, arguing the innovation could boost tech stocks.

Quincy Krosby, chief global strategist for LPL Financial, told Fortune Wednesday that rising interest rates mean innovating to provide growth will be critical for tech companies, and AI can help provide that innovation.

“As Artificial Intelligence (AI) becomes increasingly sophisticated, this could be the catalyst that helps drive the sector in its next phase,” he said.

With the Federal Reserve raising interest rates to fight inflation, the tech-heavy Nasdaq Composite sank over 30% in 2022. Investors repriced many risky, unprofitable tech stocks for a new era where borrowing to create revenue growth will be much more costly. 

But this year, the Nasdaq is up over 13% amid stronger than expected economic data and optimism surrounding AI. The Global X Robotics & Artificial Intelligence ETF—which tracks companies that could “benefit from increased adoption and utilization of robotics and artificial intelligence”—has jumped nearly 15% in the past 30 days alone. And shares of software AI firms like C3.AI and Palantir are up over 105% and 23%, respectively, over the same period.

While the development of AI tech has been, and should continue to be, a boon for investors, economists have warned that it will likely replace jobs and lower wages. OpenAI CEO Sam Altman has even argued his tech “breaks capitalism.” 

Tech experts also note that AI-enhanced search engines can be unreliable, and have expressed concerns that the industry could end up being dominated by a few tech giants.
“The problem with A.I. is that it’s likely that the three most well-funded [companies] will become the monopoly or duopoly or oligopoly in this business,” Wesley Chan, who created Google Analytics and now works as an investor, told Fortune’s Anne Sraders on Monday.