MW 5 myths about AI that could be keeping you from investing in up-and-coming tech stocks

By Cody Willard and Bryce Smith

AI and robotics are giving investors a new market of stocks to watch

The next Alphabet, Apple and Amazon are being built on the back of AI right now.

Artificial intelligence is arguably the most significant economic revolution since electricity. Like electric lights and the internet before it, AI is a paradigm shift, laying the groundwork for the next century of innovation. But with that promise comes a lot of confusion. Here are the five most common misunderstandings about AI - and why they're wrong:

1. AI is in a bubble and will crash like the internet in 2000: Yes, dot-com valuations were insane. But AI isn't just a new tech fad - it's a paradigm shift. Unlike the dot-com era, where many companies had little more than a Super Bowl commercial and an internet domain, today's AI leaders are giants with robust infrastructure and real products.

Moreover, the AI revolution is happening faster than the internet or smartphone revolutions. AI stock volatility? That's the price of exponential growth. Some companies will crash and burn, sure. But others will emerge stronger than ever - the next Alphabet $(GOOG)$ $(GOOGL)$, Apple $(AAPL)$ and Amazon $(AMZN)$ are being built on the back of AI right now.

2. There aren't enough mainstream AI applications to matter: This is like saying in 1996, "What's the big deal about the internet? I can't even get a photo to load without it taking 10 minutes."

AI is already powering Netflix $(NFLX)$ recommendations, Amazonorders and your TikTok addiction. That's just the tip of the iceberg. Behind the scenes, AI is transforming logistics, medical diagnostics, mortgage underwriting and more. And the most profound applications haven'teven arrived yet - AI doctors, AI CEOs, AI best friends, humanoid robots and on and on.

Think about when the App Store launched. Could you have imagined it spawning all the applications it has, including ride-hailing, dating, food delivery and global logistics apps?

That's where things are with AI right now. The platform is here. Thedevelopers are coming. And the innovation is about to explode.

3. AI isn't truly intelligent, and LLMs are commoditized: Sure, to some, large language models, or LLMs, look like autocomplete on steroids.But that's like calling a computer a souped-up calculator in 1985. Today's LLMs are rapidly evolving into agents capable of reasoning, planning and autonomously operating workflows. The companies building the infrastructure for AI - Amazon, Alphabet, Microsoft $(MSFT)$, Meta $(META)$ and Tesla's $(TSLA)$ xAI among them - are deploying tens of billions of dollars into what will become the most powerful and profitable AI platforms. This is an oligopoly where the dominant players are only getting stronger. Keep an eye on up-and-comers GitLab $(GTLB)$ and Pure Storage $(PSTG)$.

4. AI development is slowing down, and a recession will halt adoption: Quite the opposite. We're seeing new breakthroughs weekly. Imagemodels now create visuals rivaling Pixar. Reasoning models are pushingthe boundaries of cognition. And infrastructure investments by AI hyperscalers are accelerating, not slowing. Even if AI R&D froze today, it would take years just to integrate current capabilities into mainstream tools. That's why companies are investing through any economic cycle - because AI boosts productivity and profits. In a recession, cost cutting becomes urgent, and AI adoption accelerates.

Technology doesn't kill jobs - it transforms them.

5. AI will destroy all the jobs: Let's get real. Technology doesn't kill jobs - it transforms them. Every tech wave has made human labor more productive, not obsolete. AI will do the same. Yes, it will eliminate tedious tasks. But it will also unlock demand by lowering costs. Demand scales with accessibility. AI won't shrink the labor market; it will expand it. What many people don't recognize is that the demand for goods and servicesisn't stagnant; when productivity gains from technology allow aggregate production to go up, demand goes up, as well.

Think of it this way: Right now, it costs x for a given good or service.If AI and robots allow the cost of the same good or service to be 1/10 of x, then the demand for those goods and services will skyrocket. The simple fact is that the demand for goods and services will grow exponentially as costs drop with AI and robotics, and there will actually be more demand for lawyers and chefs and software developers to provide these goodsand services (with the help of AI and robots) to more and more people.

The history of technological innovation is a history of taking what was once luxury or exclusive and making it mainstream: from indoor plumbing to automobiles to airplane rides.

AI won't cause human labor to vanish; it will make work and careers exponentially more productive. AI and robots are going to be fantastic helpers for humanity, rather than the instruments of our demise. As humans, our role will be managing groups of robots and AI to accomplish the extraordinary, as well as the ordinary. So, no, AI won't "take our jobs." There will be plenty of new, exciting, high-value jobs to go around in the years to come, and humanity's future will be much brighter with AI and robots than without them.

Cody Willard is the founder and CEO of 10,000 Days Capital Management and the publisher of TradingWithCody.com, a subscription trading newsletter offering real-time trade alerts. Bryce Smith is an attorney and analyst with 10,000 Days Capital Management and longtime investor.

Willard, Smith and their affiliated funds were net-long TSLA, META, GOOG, AMZN, NFLX, AAPL, NVDA, PSTG and GTLB and net-short MSFT at the time of publication. Positions can change at any time and without notice.

Also read: How Microsoft can make real money off its AI investments - and break away from OpenAI

Plus: What is AI really giving back to tech investors? Here's the hard truth.

-Cody Willard -Bryce Smith

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May 23, 2025 15:53 ET (19:53 GMT)

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