Investing in AI: Navigating the Hype

Sparkline Capital

Kai Wu

Research

17 Pages

Sparkline Capital examines how to invest in artificial intelligence while avoiding the boom bust patterns of past tech revolutions. Kai Wu builds a GPT based AI financial analyst, combines it with intangible value metrics, and applies the framework to AI exposed stocks, popular ETFs, and even jobs that could benefit from or be reshaped by AI.

Date published: July 2023

Key Takeaways

Tech bubble lessons: Sales grew around eleven fold while valuation compression produced roughly an eighty percent peak to trough loss for investors.
Intangible value framework: Intangible value metrics help separate cheap innovators from over hyped names, supporting value style stock selection in new tech sectors.
AI exposure insights: S and P 500 holds about 42% in AI stocks, yet roughly half sits in expensive names vulnerable to compression.
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