The AI-driven market rally is navigating a big selloff amid weak US jobs and Q2 earnings reports, rising geopolitical tensions that threaten global supply chains, and a lack of clarity on how massive investments in AI translate to profit for investors and end-users. It is natural for investors who witnessed over 700% gains from just Nvidia shares since 2022 to grow restless when companies like Alphabet and Amazon spend tens of billions of dollars on AI with relatively no revenue to show for it.
Furthermore, industry experts are also concerned that tech giants are launching new AI products too fast for customers to keep up and understand. However, the new technology will likely take time to mature and fit into business models across industries to deliver high workflow efficiency and accuracy. According to Forrester principal analyst Christopher Gilchrist, AI giants like Microsoft and Google could start making significant cash on their AI sales in the next three years.
