Many people think this round of gains in the US stock market was driven purely by AI.
I think that’s only half right.
What truly drives the rally isn’t AI itself, but the market starting to believe that AI can actually make money.
In the past few years, AI has mostly been about storytelling.
This year, more and more companies are starting to deliver scorecards.
Microsoft has deeply integrated AI into Office and Azure; Meta continues to ramp up its AI infrastructure; and NVIDIA’s data-center business remains a growth engine.
Capital markets never give long-term backing to “concepts.”
In the end, they only back profits.
That’s also why recently, the performance among AI-related companies has started to diverge.
Companies with products, revenue, and cash flow keep hitting new highs.
But companies that have only the AI concept—and still haven’t been able to turn it into results—have started to see their hype cool down.
I increasingly feel that AI investing is entering the next phase.
In the past, it was about who could tell the better story.
Now it’s about who can turn the story into profits.
Next, the biggest opportunity in the US stock market may not just be among the hottest AI companies.
It may be with those enterprises that have truly put AI to work in their business and started creating value.
What the market likes most was never “the future.”
It’s the future that’s getting closer to reality.
I think that’s only half right.
What truly drives the rally isn’t AI itself, but the market starting to believe that AI can actually make money.
In the past few years, AI has mostly been about storytelling.
This year, more and more companies are starting to deliver scorecards.
Microsoft has deeply integrated AI into Office and Azure; Meta continues to ramp up its AI infrastructure; and NVIDIA’s data-center business remains a growth engine.
Capital markets never give long-term backing to “concepts.”
In the end, they only back profits.
That’s also why recently, the performance among AI-related companies has started to diverge.
Companies with products, revenue, and cash flow keep hitting new highs.
But companies that have only the AI concept—and still haven’t been able to turn it into results—have started to see their hype cool down.
I increasingly feel that AI investing is entering the next phase.
In the past, it was about who could tell the better story.
Now it’s about who can turn the story into profits.
Next, the biggest opportunity in the US stock market may not just be among the hottest AI companies.
It may be with those enterprises that have truly put AI to work in their business and started creating value.
What the market likes most was never “the future.”
It’s the future that’s getting closer to reality.
