The remarkable performance of generative AI stocks, which have outperformed the market for the last 18 months, may be coming to an end. Despite a 20% increase in the Generative AI Stock Index this year, the gap between it and the Nasdaq has narrowed, suggesting trouble ahead for these stocks. The key to their continued success lies in the emergence of a “killer app” that makes people willing to pay for AI chatbots. However, fear of reputation-damaging hallucinations, lack of product vision, and execution skills are hindering the delivery of such a killer app. Unless companies can create a compelling reason for people to pay for generative AI, demand for related products and services may decline.
Generative AI Stocks’ Winning Streak May End
Unless people start to pay for the AI chatbots, a bet on the stock of companies building them could quickly lose money.
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