(Weekly Summary) This cutting-edge tech company is now in AI’s sights

Hello, reader.

In a recent Smart moneywe discussed how artificial intelligence has both creative and destructive possibilities. (You can read more about this below.)

However, it is certainly not the first technology to introduce such a dichotomy. Many technological innovations throughout the ages have provided widespread benefits, but not without causing a dose of upheaval.

For example…

• The light bulb was one of the greatest inventions of all time, but it did the kerosene lamp industry no favors.
• The automobile revolutionized transportation, but it also nailed the saddlery and blacksmith industry.
• The railroad ended the Pony Express. Later, the airplane put an end to many railroad companies.
• The VCR bankrupted many movie theater chains. Then streaming services drove the video rental industry in the same direction.

Like some of these technological advances, AI will certainly create new generations of millionaires and billionaires, perhaps even the world’s first trillionaire… but it will also destroy jobs across the socio-economic spectrum – from warehouse workers and truck drivers to accountants and lawyers.

Amazon.com Inc. (AMZN)for example, it is actively developing AI-enabled robotics in its warehouses to perform tasks that humans currently do. While Amazon claims its AI-based efforts will create more than “700 new job categories,” the logistics giant has laid off about 27,000 workers over the past two years.

It is important to understand that exponentially improving technology has a habit of creeping up on us and changing the world as we know it. This is especially true now that artificial intelligence is pushing its tentacles into almost every aspect of human life.

As AI expands its reach, we investors must continually examine both the opportunities and dangers it will create for various industries.

Today, let’s take a look at a company that seems particularly vulnerable to the growing presence of AI in the global economy…

Once upon a time, Shutterstock Inc. (SSTK) was a cutting edge graphics company with a massive and valuable library of proprietary images. Today, that library looks more like an anvil than a pair of wings.

Thanks to generative AI technologies like OpenArt, “own graphics” are almost a thing of the past. On demand, OpenAI’s art generator can create an unlimited range of “property” images from scratch. “Firefly” image generator from Adobe Inc. (ADBE) it also produces images instantly, just by converting written text to an image.

The rapid improvement of artificial intelligence – and eventually general artificial intelligence (AGI) – will only extend to these capabilities.

Because of these competitive threats, subscriber “churn” is on the rise at Shutterstock. As a result, gross margins and net income both collapse. Over the past nine months, the company’s trailing 12-month net income has fallen from $118 million to just $47 million. These declining fortunes reflect declining demand for the company’s core content library.

Unsurprisingly, the company is trying to integrate generative AI features into its platform as quickly and comprehensively as possible. But I think the effort will be a losing battle, at least from the point of view of generating long-term profit growth.

According to the consensus of Wall Street analysts, Shutterstock will earn $1.90 per share this year and $3 next year. But both estimates are well below what analysts predicted two years ago. I expect these estimates to continue to fall as AI art generators take more and more of Shutterstock’s business model.

While we cannot predict the rapid evolution of artificial intelligence or its future impact, there are steps we can take today to help prepare for the future for the changes to come.

AI won’t automatically stop Shutterstock’s growth potential, but it will certainly throw boulders in the way. So I suggest you shop elsewhere.

And for every stock or fund you shop for, it is too important to have a solid exit strategy straight away. Something based on math and data, not emotion.

That’s why I want to turn your attention to a discussion which I had last night. I sat down with a special guest who revealed a powerful tool that can help you determine the optimal time to sell those stocks that reveal the “dark side.”

You can watch our video conversation now.

Today is the last day to secure a 90-day trial, so make sure you act fast.

Now let’s look at what we covered here Smart money last week…

Smart money Elevate

This may be your most important investment decision

After the Federal Reserve cut key interest rates by 0.5%, Treasury yields fell and the stock market hit new record highs the following day. While this is optimistic news for all kinds of investments, there is still uncertainty ahead. In this case, an exit strategy is required. Click here to continue reading how critical it is.

The move to make after Musk’s device achieves “groundbreaking” status.

Elon Musk’s Neuralink brain-computer interface (Bcl) the “Blindsight” device has been officially designated a “breakthrough device” by the US Food and Drug Administration. According to Musk, the device aims to restore vision, including in patients “who have lost both eyes and the optic nerve.” For more on exactly what the FDA designation means and how you can take advantage of the company’s continued success, click here.

Everyone hates this stock, but it could become the next AMD

In 2007, AMD faced financial problems, and the financial crisis at the time only made the situation worse. Then CEO Hector Ruiz made a critical decision for AMD’s health: splitting the company in half. This success story is one of the reasons we continue to like one of the most hated stocks on the market. Here’s our case for it.

Why you should embrace AI progress despite its dark side

One thing is certain when it comes to artificial intelligence: it cannot go back to the way things were. As this new reality entered a limitless, ever-expanding universe of possibilities—and plenty of entanglements along the way— this Smart money the problem explains why we should accept this process of trial and error.

The best tool to find growth stocks

The 2,500-year-old fable “The Tortoise and the Hare” has more to do with stock investing than you think. It’s simple: when you’re a growth investor, the last thing you want to be is the rabbit. You don’t want to hit the snooze button when the market is steadily rising, nor do you want to have an unpleasant reaction to a blip in the market. Fortunately, Louis Navellier is recently renovated Stock grader the tool will help you channel the patient turtle. Click here to find out what it’s all about.

I can’t wait to Elon Musk’s Robotaxi

Now, I want to go back to AI… because Tesla Inc. (TSLA) CEO Elon Musk is set to unveil his “Robotaxi” at an event on October 10. It is a fully automated car with no mirrors, no pedals and no steering wheel.

The era of autonomous vehicles has finally arrived… whether we like it or not. And that means we want to find ways to take advantage of the latter.

So we’re going to delve deeper into this topic over the next week or so…and I’ll also share with you how you can profitably navigate your portfolio through Musk’s dream of a driverless world.

Stay tuned.

Sincerely,

Eric Fry

Editor, Smart money