AI investment has dual nature

The growing dominance of AI in the world, whether it is the reshaping of the workflow of industries or the influence of investor governorates, is to define how society and economies develop. Of course, the noise and the tinnitus around artificial intelligence and difficult to ignore it, but the question is, does this noise overwhelm the real challenges and restrictions in artificial intelligence?

According to a new Today’s trading reportThe excitement about the artificial intelligence bubble indicates the excessive value that reminds us of the Dot-Com. While some areas of artificial intelligence are real transformation, they are not all boil or bust, but somewhere in the middle.

Dan Bacley, Senior Analyst in daytrading.comIt is believed that artificial intelligence is a real technological boom, but it comes with excessive and speculative pockets along the way. He said: “We are witnessing standard capital flows, high assessments in the sky, unilateral feeling, and investment driven by FOMO before common sense. However, we also see cases of use in the real world to invest in industrial infrastructure.”

“The best framing is that artificial intelligence is a real boom that contains local bubbles, not an obsession in the council.”

The question remains – Is Amnesty International a bubble? The bubble indicates when the price of the asset, such as shares or sharing, and sometimes, even the entire industry, grows in a much higher financial value than its actual value. This usually occurs due to excessive disposal of investors “after the crowd”, rather than making decisions on real factors such as demand and profits.

The stock is exaggerated

Currently, a number of artificial intelligence company, including Microsoft and NVIDIA, are much higher than its actual profits or sales. The rise in stock prices is usually justified through high profits, but the most recent artificial intelligence companies’ assessments, at the present time, are exaggerated because they assume large future profits that may never be achieved. This is evident through a large investment of $ 560 billion in artificial intelligence by companies over the past two years, but the gradual revenues estimated from these companies are only 35 billion pounds – a large gap of 525 billion dollars.

The noise of artificial intelligence before the results

Society as a whole assumes that artificial intelligence will revolutionize everything, but the Trading Day report discovered that many companies do not generate enough profits to ensure such excitement. Investors priced wide returns on small technologies in the early adoption stages in “Hope” that the returns will match their investments. Moreover, many companies are “artificial intelligence washing”, which is a tactic to exaggerate their capabilities to market themselves as more valuable than traditional evaluation.

Financial risks

Some international players such as NVIDIA and Amazon represent their growth through strong cash flows, but many of the latest emerging companies of artificial intelligence depends heavily on investment capital or debt financing, making it very weak if the financing conditions change. Current enthusiasm for artificial intelligence can attract emergency financing in some cases, but this dependence on atrocal financing highlights the fragility in some sectors of the artificial intelligence market.

Optimism is unilateral

The feelings of the investor towards artificial intelligence are very positive, but also upward. Smrediated views are rarely recognized, which may leave the artificial intelligence market vulnerable to sudden corrections if you lose confidence. Historically, bubbles tend to synchronize the high fluctuations, but the S&P 500 has been relatively calm so far, indicating stability at the surface level. However, this confidence between investors may reflect convinced of the promise of artificial intelligence.

Experienced investors who feed the noise of artificial intelligence?

According to daytime circulation, there may be an increase in investors who lack experience jumping on the noise of artificial intelligence assessment and increased risk of sudden corrections. Just like the behavior seen in the Dot-Com bubble, new buyers follow remote accounts, at the present time based on the uproar of social media and news addresses, rather than focusing on current profits or real value.

Liquidity keeps the infrastructure of Amnesty International

Although interest rates are higher compared to pre -guardian levels, major technology companies have enough liquidity to continue investing in artificial intelligence without great risk. The percentage of fresh shares or uncertain borrowing remains relatively low.

Storage speculation

Some artificial intelligence companies, such as Coreweave and Open AI, store resources strongly, including artificial intelligence chips and engineering talent, in anticipation of demand. This creates more financial risks if the growth in sales slows down. With the absence of a return on investment or clear business models, the capital is at the mercy of the growth of artificial intelligence, or its absence.

The bubble does not explode

The Day Trading report highlights a set of fears, similar to the Dot-Com bubble in the late nineties and early first decade of the twentieth century. For example, artificial intelligence is already used widely, as it achieves productivity gains, especially in sectors such as financing, logistics and media, which was not clear in the Dot-Com era.

Although artificial intelligence companies claim to create real value at the present time, compared to investments in infrastructure, a few of them have profitable margins, such as Microsoft and NVIDIA.

Long -term growth for growth has been made, not a short -term return. Therefore, real returns may be fulfilled as artificial intelligence capabilities are revealed over time. Eric Schmidt, former Google CEO, described “Amnesty International as an infrastructure for a new industrial age, not just a passing technical innovation.”

Dan Buckley does not think that artificial intelligence is just noise, but excessive optimism can be dangerous. “Artificial intelligence is real and valuable.” “But when the market morale outweighs real business results, it began to worry about the gap that has become dangerous for investors.”

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