The artificial intelligence (AI) revolution has hit a speed bump. On June 25, 2024, Goldman Sachs released a thought-provoking research report titled “Gen AI: Too Much Spend, Too Little Benefit?” This analysis sent ripples through the tech sector, causing many AI-centric stocks to stumble.
Goldman’s report paints a sobering picture of AI’s near-term economic impact. It suggests that building out AI infrastructure could cost a staggering $1 trillion. More concerningly, the report argues that AI’s cost-saving potential may not justify this enormous price tag. It also raises concerns about looming energy constraints potentially limiting AI’s ability to boost top-line growth outside the chipmaking industry.
Image source: Getty Images.
Investors, already jittery from a slowing economy and geopolitical tensions, seemed to take these arguments to heart. The result? A significant pullback in many of the market’s most prominent AI players.
A buying opportunity
While Goldman’s analysis raises valid points, I believe it may be overly focused on short-term hurdles. AI isn’t going to revolutionize the world overnight, but its transformative potential is undeniable. We’re witnessing the early stages of a technological shift that will reshape industries, boost productivity, and create entirely new business models.
Consider this: AI is currently in its infancy. The advances we’ll see in the next two to three years will likely make today’s AI look primitive by comparison. I’m convinced we’re on the cusp of seeing the emergence of true “killer apps” — AI-powered innovations that drive widespread adoption and showcase the technology’s game-changing capabilities.
Moreover, once AI becomes deeply integrated into popular ecosystems like Apple‘s, we’ll likely see a quantum leap in public awareness and appreciation of AI’s potential. This near-term event could trigger a new wave of investment and innovation across the tech sector.
With this long-term perspective in mind, I see the current dip in AI stocks as a compelling buying opportunity for patient investors. Two companies in particular…
..
