There’s more to the AI boom than meets the eye…

From the desk of Miles Everson:

I’m thrilled to talk about another investing insight for today’s “The Independent Investor.”

Every Wednesday, I talk about investing tips and strategies in the hopes of helping you attain financial freedom through this activity.

Today, let’s talk about as-reported metrics and how this can impact stock valuations.

Read on below to know more.

There’s more to the AI boom than meets the eye…

Back in its infancy, the Internet was an emerging technology with HUGE implications that wasn’t taken seriously by many companies.

Throughout the dot-com boom in the 1990s, the emerging technology was dismissed by some as a fad and something only tech companies and startups employed.

Back then, detractors did not yet understand the Internet’s potential and how it can impact many sectors of the economy.

Those who embraced the massive potential of the Internet early on adapted and thrived.

… and the detractors?

They missed out on one of the most impactful technological advancements of the century and were left behind. At present, more than 5 billion people across the globe depend on the Internet.

You see, the secret to the dot-com boom was it wasn’t just relegated to tech companies; every business that exists today had to become a dot-com company.

In some ways, the story we’ve told mirrors the current situation with AI… and just as was the case with the Internet, falling behind in AI adoption just could be the biggest mistake a company can make today.

Here’s why…

Dismissing An Emerging Technology

Back in the 1990s, companies questioned the necessity of having and maintaining a robust online presence.

Many asked: “Why do we need a website when our physical stores are making so much money?”

Borders —one of the largest bookstore chains at the time—was a company that held a similar view.

The bookstore chain had a vast network of stores and believed that its customer base would continue to patronize the in-store experience it provided.

However, when the dot-com mania came into full swing, Borders made a critical mistake of outsourcing its online presence and e-commerce operations to Amazon .

The move seemed to make sense at the time since it enabled Borders to focus on its physical stores.

In reality however, the bookstore chain handed its digital customer base to a competitor when it should have been adapting its business model to the rapidly changing retail landscape.

Borders failed to realize that the Internet wasn’t just a fad or a niche market; it was the future of retail.

The bookstore chain’s decision to outsource its online operations to Amazon from 2001 to 2008—the prime years of the dot-com bubble—marked the beginning of the company’s decline.

By the time Borders realized the importance of e-commerce, it was too late as Amazon had grown into the giant it is today and there was just no way for the bookstore chain to compete.

Unfortunately, the bookstore chain went bankrupt in 2011.

AI is More than Just a Buzzword

Fast forward to today, we’re facing a similar situation with AI.

AI is being dismissed as something tech companies or specific industries use to draw investors in.

However, just like with the Internet, AI won’t be confined to a single sector; it is a tool that businesses will need to leverage if they do not want to be outpaced by competitors.

It will take some time but AI will eventually become a tool every business will need to leverage.

Those who ignore this emerging technology will face the same fate as Borders—a company that had everything going for it but lost it all by failing to evolve.

Hope you’ve found this week’s insights interesting and helpful.

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Stay tuned for next Wednesday’s The Independent Investor!

Would you want to own a “piece of machine” that traps you inside with a violent, naked man?

Learn more about why manias never change in next week’s article!