AI can't keep growing forever as most investors expect. There is an often overlooked and serious supply and demand bottleneck.
AI's promise is productivity increase which directly add to margins. This is where most investors are currently focused.
However, a lot of jobs are being lost to AI and robotics, and this trend will continue for the foreseeable future.
According to expert estimates, within 10 years (give or take), we'll be living in a world where most jobs would have been taken over by AI and automation.
This is where the crux of the problem lies. Mass joblessness WILL lead to a dramatic decline in buying power.
No buying power -> No demand
When there's no demand, margins mean nothing regardless of how productive a company gets. If you can't sell, how does it matter if you are uber productive?
In fact, AI and automation is bound to have the exact opposite effect of what most investors are currently so excited about.
Many companies will have to significantly drop prices, and yet many others will have to file bankruptcies due to lack of demand.
In short, regardless of your predictions about AI, don't get complacent with your investments.