+

Cookies on the Business Insider India website

Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.

Close
HomeQuizzoneWhatsappShare Flash Reads
 

AI stocks could prove unprofitable in the future as money has already been made on them in the current rally, 40-year market veteran Jim Bianco says

Jun 26, 2023, 22:18 IST
Business Insider
Jim Bianco, head of Bianco Research LLC, speaks at the Reuters Investment Outlook Summit in New York December 11, 2007.Reuters
  • It's possible investors won't make any money on AI stocks in the future, according to Wall Street expert Jim Bianco.
  • "The money has already been made in the hope for what AI is going to be," Bianco told Fox Business.
Advertisement

Artificial-intelligence stocks may prove unprofitable in the future as investors have already made money on them from this year's hyped-up rally, according to 40-year market veteran Jim Bianco.

"What happens with these stocks is they discount the future. So AI could very well be the hype that we think, but you could very well be buying these AI stocks and in several years from now, wind up not making any money because the money has already been made in the hope for what AI is going to be," the president of Bianco Research said in an interview with Fox Business.

Bianco used the example of Amazon stock, which took many years to make a new high following a sharp fall in the late 1990s after founder Jeff Bezos unveiled his vision for a boom in online retailing.

"That did happen. But if you bought the stock, it took you 12 years to make money," Bianco said of investors in Amazon stock.

This year has seen a surge in investor excitement over AI stocks, following the stunning debut of OpenAI's ChatGPT. It's seen investors pump money into popular tech stocks including Microsoft, Amazon and Nvidia, boosted company valuations, and inflated the wealth of several tech CEOs.

Advertisement

Bianco's forecast of AI stocks is at odds with that of several industry bulls. For example, the AI revolution could send the stock market to record highs as it'll boost productivity levels, according to Goldman Sachs.

Aside from AI, Bianco also commented on US inflation, saying price pressures are bottoming out right now. "We're seeing maybe the lows of the year right now," he said. Inflation has dropped from its mid-2022 highs, rising by 4.0% through May, thanks to the Federal Reserve's relentless interest rate hikes over the past year.

You are subscribed to notifications!
Looks like you've blocked notifications!
Next Article