AI is printing money. So why are investors getting scared?
Samsung just flagged a 19-fold jump in quarterly operating profit, largely driven by the massive demand surrounding AI infrastructure and memory chips.
In almost any other market, numbers like these would trigger euphoria.
Instead, Samsung shares fell.
And I think this tells us something important about where the AI market is right now.
The question is no longer whether AI is real.
AI is real. Companies are spending billions on data centers, chips, models and infrastructure. Demand is strong and some companies are generating extraordinary profits from it.
The question investors are starting to ask is much harder:
Can this growth continue at the same speed?
When expectations become extremely high, even incredible results can look disappointing. A company can report record profits and still lose market value because investors are already pricing in an even bigger future.
This is why I don't think the biggest AI bubble is necessarily in the technology itself.
The bubble might be in our expectations.
We expect every AI company to grow exponentially. We expect infrastructure spending to continue forever. We expect every new model to create another trillion-dollar market.
But technology doesn't grow in a straight line.
The internet changed the world, yet many internet stocks collapsed.
AI could transform almost every industry and, at the same time, many AI stocks could still be massively overvalued.
Both things can be true.
Maybe the next phase of the AI boom won't be about asking:
"Who is involved in AI?"
Maybe it will be about asking:
"Who can actually turn AI into sustainable profit for the next 10 years?"
That's a very different market. 👀
Samsung just flagged a 19-fold jump in quarterly operating profit, largely driven by the massive demand surrounding AI infrastructure and memory chips.
In almost any other market, numbers like these would trigger euphoria.
Instead, Samsung shares fell.
And I think this tells us something important about where the AI market is right now.
The question is no longer whether AI is real.
AI is real. Companies are spending billions on data centers, chips, models and infrastructure. Demand is strong and some companies are generating extraordinary profits from it.
The question investors are starting to ask is much harder:
Can this growth continue at the same speed?
When expectations become extremely high, even incredible results can look disappointing. A company can report record profits and still lose market value because investors are already pricing in an even bigger future.
This is why I don't think the biggest AI bubble is necessarily in the technology itself.
The bubble might be in our expectations.
We expect every AI company to grow exponentially. We expect infrastructure spending to continue forever. We expect every new model to create another trillion-dollar market.
But technology doesn't grow in a straight line.
The internet changed the world, yet many internet stocks collapsed.
AI could transform almost every industry and, at the same time, many AI stocks could still be massively overvalued.
Both things can be true.
Maybe the next phase of the AI boom won't be about asking:
"Who is involved in AI?"
Maybe it will be about asking:
"Who can actually turn AI into sustainable profit for the next 10 years?"
That's a very different market. 👀
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