Economics
Why the Profitable AI Boom Has Not Gone ‘Bust’
After a more-hawkish-than-expected speech from Federal Reserve Board Chair Jerome Powell this week, stocks are suddenly plummeting. The record AI-inspired…
After a more-hawkish-than-expected speech from Federal Reserve Board Chair Jerome Powell this week, stocks are suddenly plummeting. The record AI-inspired performance that tech stocks had in the first half of 2023 is turning into a late-summer market crash.
Did the Fed pop the AI Bubble with its shockingly hawkish commentary? Are we going back to the nasty bear market of 2022?
No, and no.
The AI Bubble isn’t popping.
Instead, the AI Boom is just experiencing some good old-fashioned growing pains.
And that’s creating some golden buying opportunities.
Looking Back On Previous Tech Booms
Every technological paradigm shift experiences growing pains. Throughout the dot-com boom of the 1990s, internet stocks had to endure Fed policy shifts, recession scares, geopolitical conflicts, and more.
Each of those headwinds weighed on internet stocks, causing them to drop.
From 1991 to ‘99, the tech-heavy Nasdaq Composite withstood seven different 10%-plus corrections and one big bear-market dive of nearly 30%.
Yet, over that same period, the Nasdaq rose almost 1,000%.
Of course, the point is that 5%, 10%, and 15% drawdowns are totally normal for new technological megatrends like the internet and AI. They’re merely par for the course.
Right now, the Nasdaq is in the middle of an 8% correction.
Painful? Yes.
Apocalyptic? Hardly.
Up next? A golden buying opportunity.
Pains Pave the Way for Gains
In the 1990s, every 10% correction in internet stocks was a fabulous buying opportunity. And we’re confident that in the 2020s, every 10% correction in AI stocks will prove to be a fabulous buying opportunity, too.
In fact, this has already been the case.
Since the AI Boom began following ChatGPT’s launch, the Nasdaq has experienced three different ~10% corrections: in mid-October 2022, late December 2022, and early March 2023.
Each was a great buying opportunity.
This September 2023 correction will likely prove no different.
Why am I so confident?
Because already, in just its first year in the spotlight, AI is having a huge real-world impact.
AI Is a Productivity Game-Changer
At Boston Consulting Group, social scientists conducted an experiment comparing the productivity of employees that actively used AI to do work against the productivity of employees who did not.
In short, they found that consultants using AI outperformed those who did not – by a lot.
On average, consultants using AI finished 12.2% more tasks, completed those tasks 25.1% more quickly, and produced 40% higher-quality results than those without.
Artificial intelligence is a productivity game-changer.
The Final Word
We’re in just the first year of the AI Boom. And already, AI is improving work productivity by more than 10% across the board. It took the internet a decade to do that.
This “AI stuff” isn’t hype. It’s the real deal.
And you need to start using it if you want to get ahead financially over the next decade.
That’s why it’s my pleasure to introduce you to Prometheus – our AI-powered stock trading system.
Prometheus leverages more than 50 fundamental and technical indicators to identify when a stock is about to surge higher in price.
In other words, it is an AI tool that’s trained to find breakout stocks.
And it is very good at its job. In the midst of the recent stock market chaos, Prometheus alerted us to a small consumer tech stock that has already popped about 20% in just a few days.
Forget the Fed, this stock market selloff, and all this talk of a bubble and a recession.
Protect yourself – and your wealth – by leveraging AI to cut through the noise and consistently score profits.
As the old saying goes, there’s always a bull market somewhere.
Now it’s time to use artificial intelligence to consistently find it.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.
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The post Why the Profitable AI Boom Has Not Gone âBustâ appeared first on InvestorPlace.
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