AI-Fueled Stock Rally Ignites Debate on Who’s Winning and Losing

tech.hindustantimes.com:

Stock rallies tied to the latest market craze may be a good investment or fears of missing out. That debate, which hits on the theme of several boom-to-bust cycles in some corners of the market, has been reignited after artificial intelligence-linked companies saw their shares pop as tech giants like Microsoft Corp. announced big investments in the industry.

The frenzy conjures memories of the crypto and cannabis crazes and even the dot-com bubble in the late 1990s, where investors piled into stocks and asked questions later. After Friday's close, a handful of firms added some $5.2 billion in market value despite announcements that look more like half-baked plans.

“It is total buyer-beware unless you know what you're doing and have proper risk management,” said Matthew Tuttle, CEO of Tuttle Capital Management. “You can't just go in and buy any company that says they're in AI.”

Generative AI, a label used to describe artificial intelligence technology that can create things like art or text, and ChatGPT — the popular tool owned by OpenAI which Microsoft just invested $10 billion in — have been mentioned in more than 165 earnings calls and press releases this year so far, more than the number of mentions in all of 2022.

The citations come with good reason. The market for generative AI could be “exceedingly large,” easily “in excess of a trillion dollars,” according to UBS analysts led by Lloyd Walmsley. The potential windfall is enticing investors and underscores the fine line between trend-chasing companies hoping to make a quick return and those with goals to utilize a technological advancement to drive growth and make billions.

BuzzFeed Inc., a struggling media company, soared 307% in a two-day frenzy in January