Key Highlights
-
A viral post on Substack has raised alarms about the swift and disruptive effects of AI adoption.
-
The researcher cautioned that agent-based AI could threaten the business models of leading companies across various sectors.
Recent analysis highlighting the potential adverse effects of artificial intelligence (AI) has sent shockwaves through the stock market, leading to drops for several prominent firms. Visa’s stock, for instance, witnessed a nearly 5% decline just on Monday.
A Grim Outlook
An independent research group, Citrini Research, published a piece on Substack laying out its theories on the possible ramifications of expanding AI use.
Will AI be the catalyst for creating the world’s first millionaire? Our team has examined an obscure company deemed an “essential monopoly” that provides crucial tech needed by both Nvidia and Intel. Read more
In this piece, Citrini paints a hypothetical economic scenario for June 30, 2028, speculating that the U.S. unemployment rate could exceed 10%, with the S&P 500 suffering a 38% drop from its peak in October 2026.
According to the analysis, this steep unemployment would largely stem from AI displacing human workers. Citrini argues that a GPU cluster in North Dakota is generating output once achieved by 10,000 white-collar employees in Manhattan—a drastic economic shift.
Well-known companies, including Visa, are singled out as particularly vulnerable to this disruption. The primary revenue stream for Visa, which relies on transaction service and processing fees, faces threats from AI models that can optimize business transactions without incurring such fees.
Is the Alarm Justified?
It’s undeniable that AI poses a disruptive threat to various business models. However, the extent of this disruption, particularly for Visa, might not be as severe as some fear. Many consumers still find pleasure in shopping—especially in person—and don’t seem overly bothered by modest transaction fees. So, I wouldn’t hit the panic button on major credit card stocks just yet.
Should You Consider Investing in Visa?
Before making a decision about investing in Visa, it’s worth noting the following:
According to analysts at Motley Fool Stock Advisor, they have identified a list of stocks that they believe are more favorable to buy right now—and Visa isn’t among them. These ten alternatives could yield impressive returns in the coming years.
For instance, if you had invested $1,000 in Netflix back when they recommended it on December 17, 2004, you’d be looking at about $424,262? Or how about Nvidia? If you’d invested $1,000 on April 15, 2005, it could be worth around $1,163,635 now!
It’s crucial to keep in mind that Stock Advisor has achieved an impressive average return of 904%, compared to the S&P 500’s 194%. So, don’t miss out on their latest top 10 list, which is crafted for retail investors by retail investors.
