By: Brady Raanes
If you’ve turned on CNBC, opened a newspaper, or sat through a dinner party in the last two years, you’ve heard the buzz: Artificial Intelligence. AI. Two letters that have managed to excite markets, terrify workers, and confuse investors all at once.
What’s wild is how quickly Wall Street’s view has flipped. Not long ago, AI was the driving force in the markets: more profit, more efficiency, and more opportunity for companies. Today? The mood is far more complicated. Investors fear that AI may kill companies and replace jobs. Software stocks have been rattled, investors are asking tougher questions, and the early optimism around AI has collided with reality.
So let’s slow down, cut the noise, and look at what AI really is, how it’s affecting daily life, why the market suddenly got spooked, and what all of this means for your portfolio.
So, What Is AI?
At its core, AI is software that learns from patterns in data and makes decisions without needing explicit instructions at every step. Think less “calculator” and more “extremely well-read intern” who has digested millions of documents and can now summarize, answer questions, write, and reason.
Most people interact with large language models, such as ChatGPT, Claude, Copilot, or Gemini. They’re trained on staggering amounts of text and learned how to predict coherent, useful responses.
Explain the stock market in a couple of paragraphs? Done.
Draft a birthday card? Sure.
Summarize a 50‑page contract? Easy.
It’s not magic; it’s math, data, and scale.
AI in Your Everyday Life
You may not realize it, but you’re already using AI constantly when you ask Siri or Alexa a question. When Netflix recommends a new show that you actually enjoy, that’s AI. When your email flags a suspicious message as spam before you ever see it, or when your bank calls about a suspicious charge on your credit card; they are using AI to detect unusual spending patterns or spam emails.
The new wave of AI goes further:
Writing & Communication – Businesses use AI to draft emails, reports, and even content like this (with plenty of human editing).
Healthcare – Models help read X-rays, MRIs, and mammograms with accuracy rivaling trained radiologists.
Customer Service – Many chat agents are now AI, handling thousands of conversations at once.
Software Development – AI writes code alongside engineers, speeding up development.
Financial Services – Research analysis, fraud detection, planning tools—our industry isn’t immune.
AI is simply very good at processing information quickly. Anything involving reading, writing, sorting, or analyzing data is fair game.
Why Investors Got So Excited
From a business owner’s standpoint, AI looks like the ultimate efficiency tool. If software can do a slice of what salaried workers do faster, cheaper, without demanding employee benefits. The profit implications are huge.
That’s why NVIDIA became the poster child of the AI boom. Its GPUs were essential for training and running large models. Microsoft, Google, Meta, and Amazon began pouring billions into chips, data centers, and AI infrastructure. For a while, AI could do no wrong.
Massive AI Investment
Is all this massive investment in data centers really necessary? In early 2025, a small Chinese startup called DeepSeek released a model that matched top American AI systems—at a fraction of the cost.
Suddenly, investors began asking new questions: What if AI doesn’t require massive hardware budgets after all? What if Big Tech’s spending spree won’t produce the expected returns? What if competition drives down AI pricing faster than anyone predicted?
Today’s spending does feel a bit like the dot‑com era: enormous optimism, massive infrastructure spending, and the belief that we must “win the race”. Time will tell, but I suspect that the AI revolution will lead to massive overspending, but we
The Job Loss Question
Few topics trigger more anxiety than AI’s impact on work. The jobs most exposed are ones that rely on reading, writing, analyzing, or communicating—ironically, college‑educated roles: software engineers, paralegals, financial analysts, customer service reps, radiologists and marketing and communications roles, to name a few.
AI likely won’t eliminate these professions, but it may reduce hiring needs and shift job descriptions.
Historically, new technology creates new jobs—but transitions can be painful, and AI is moving faster than past revolutions. The winners will be companies that adopt AI to amplify their workforce, not simply replace it.
From Excitement to Anxiety: What Changed?
Big Tech has committed hundreds of billions to AI infrastructure. If AI becomes a commodity (cheap, widely available, easily replicated), those investments may not generate the returns investors expected.
Combine that with market valuations for the S&P 500 near dot‑com era levels, and there’s very little margin for error.
Transformative technology doesn’t always produce transformative investment returns.
The internet changed the world, but internet stocks produced a lost decade for investors after the bubble burst. The same was true for railroads, automobiles, and early electricity. Often, the biggest winners aren’t the technology creators; they’re the companies that quietly use the technology to run better businesses.
AI may be one of the most significant technological revolutions of our lifetimes. But revolutions take time, and the path from “great technology” to “great investment” is rarely straight.
As always, we’re grateful for the trust you place in us. We take that seriously and remain committed to helping you navigate whatever comes next.
Any opinions are those of Brady Raanes and not necessarily those of Raymond James. This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. The information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Expressions of opinion are as of this date and are subject to change without notice.
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