A trader looks at screens of financial data at the offices of CMC Markets in the City of London on Dec. 10, 2018. When new technologies make a big splash, an initial sharp rise in stock prices causes investors to pile in, driving down the cost of capital, and many investors end up taking losses.Hype over revolutionary new technologies such as AI is not a new phenomenon. Neither is the fact that they, counterintuitively, tend to make for lousy investments., and the internet in the 1990s.
But AI is also drawing attention for another reason – the notion that it is getting so powerful that it could be used to beat the market. In other words, you don’t need to buy AI stocks, but maybe you can use AI to select a portfolio of stocks that will outperform.