The Terrifying Truth Behind AI Stocks You Need to Know Before Investing

There is no denying the incredible advancements in artificial intelligence (AI) in recent years. From self-driving cars to personalized recommendations on streaming platforms, AI is all around us, and it's changing the way we live our lives. AI stocks have also become a popular investment opportunity, with many investors eager to cash in on this growing industry. But according to hedge fund manager Doug Kass, there are some alarming truths behind AI stocks that investors need to know before investing.

Kass, who has over 40 years of experience in the financial industry, recently made some bold statements about AI stocks. In a tweet, he warned, "Investors have no idea of the dangers of investing in AI and robotics stocks where the outcomes are unpredictable."

Kass's warning is not without merit. The truth is, AI stocks are not all created equal. Some AI companies are making significant strides and are poised for growth, while others may not be sustainable in the long run, and some may even pose a risk to society. Here are some of the quantifiable examples that investors need to keep in mind before investing in AI stocks.

Quantifiable Examples:

1. AI stocks are highly volatile

Investing in AI stocks comes with risks, as they are highly volatile and can experience significant price fluctuations. For example, in March 2018, Facebook experienced a data breach scandal, causing its stock price to plummet. Meanwhile, IBM shares have been declining over the past decade, as the company has struggled to pivot its business towards AI.

2. AI companies are not always profitable

Although some AI companies may be making strides in the industry, they may not be turning a profit. Take Tesla, for instance. Despite having an incredible vision for AI technology, the company has yet to turn a profit in its history.

3. AI poses risks to society

One of the most significant dangers of AI stocks is the potential risks to society. AI technologies are quickly becoming integrated into our daily lives, from self-driving cars to facial recognition technology. However, when AI is not developed and deployed responsibly, it can pose significant risks to public safety and privacy. For example, in 2019, PwC estimated that AI could contribute up to $15.7 trillion to the global economy by 2030, but also warned that AI could displace up to 30% of existing jobs.

Conclusion:

1. AI stocks pose risks to investors and society

AI stocks are often touted as the "next big thing" in investing. However, investors need to understand that investing in AI companies comes with significant risks, such as volatility and uncertainty around profitability. Additionally, there are significant risks to society as well if AI is not developed responsibly.

2. Not all AI companies are created equal

Investors need to be selective when investing in AI stocks and consider the company's track record, profitability, and potential risks to society. Some AI companies may be developing sustainable and useful technologies, while others may not be.

3. Proceed with caution

Investors need to carefully assess and understand the risks associated with investing in AI stocks before jumping in. It's essential to conduct thorough research, diversify investments, and keep an eye on the company's performance and potential risks.

Overall, AI is an exciting and rapidly-growing industry, but investors need to keep in mind the risks before diving in headfirst. The industry is still in its infancy, and there is much we don't know about its long-term effects on society. However, with careful consideration and prudent investment strategies, AI stocks can be a promising opportunity for investors.

References:

1. https://www.cnbc.com/2018/03/19/traders-brawl-for-the-best-artificial-intelligence-stocks.html

2. https://www.thebalancesmb.com/ai-stocks-to-buy-right-now-for-profit-and-gain-4691972

3. https://www.mckinsey.com/featured-insights/artificial-intelligence/global-ai-survey-ai-proves-its-worth-but-few-scale-impact

4. https://www.cnbc.com/2019/08/16/artificial-intelligence-could-displace-40percent-of-the-worlds-workers.html

Hashtags:

#AI

#Investing

#Stocks

#Finance

#Technology

#Sustainability

Article Category: Finance/Investment