AI Stocks: From Matrix Multiplication to Market Valuation
This blog examines the AI-related stock market, which has delivered exceptional returns over the past several years and whose long-term prospects remain promising. Despite this favorable outlook, AI-related stocks have recently experienced significant volatility. Much of this reflects the tension between exceptionally high market expectations and uncertainty surrounding AI monetization, compounded by elevated valuations, interest-rate sensitivity, geopolitical risks, and export controls. The objective of this blog is to develop a framework for understanding the long-term evolution of the AI investment landscape. Before proceeding, I should note that I am not a professional financial analyst and have been actively investing for only about one year. My professional background lies instead in mathematics, artificial intelligence, engineering, medical imaging, and related quantitative disciplines. These perspectives, together with discussions with friends and extensive use of ChatGPT as a ...