AI Stocks: A Golden Opportunity or a Mirage?
Artificial Intelligence (AI) is ushering in a new era for the tech industry, driving staggering growth in stocks related to this transformative technology. In fact, 7 of the 10 highest-performing tech stocks in the past five years owe their success to the AI explosion. While the S&P 500 nearly doubled during this period, the slowest-growing AI stock soared by an awe-inspiring 708%. For the savvy investor, the rising AI tide means potential for significant returns. However, it’s crucial to remember not all AI stocks are created equal. There are diamonds in the rough, like Dell (NYSE: DELL) and IBM (NYSE: IBM), whose stock prices offer attractive entry points despite their profound AI capabilities.
Dell: An Undervalued Gem in AI Hardware
Dell, often overlooked in the AI space, stands out as a robust contender in the AI hardware market. As a seasoned maker of cost-effective AI training computers featuring advanced cooling systems, Dell’s stock has seen a modest increase of 133% since the summer of 2022—a stark contrast to the 500% jump of Super Micro Computer. Dell’s fundamentals are strong, with solid profits and a clean financial record, unlike some competitors. With AI system revenues doubling from Q4 of fiscal year 2024 to Q1 of 2025 and a growing backlog of unfilled AI orders worth $3.8 billion, Dell is strategically positioned to leverage the ongoing AI boom. In essence, Dell offers a low-priced stock teeming with growth prospects. Investors seeking exposure to AI hardware without the hefty price tag might find Dell an enticing option.
IBM: The Overlooked Enterprise AI Giant
IBM is no newcomer to the AI frontier. With roots in AI research dating back to the 1990s, the company leads globally in AI patent applications. Although IBM’s transformation into a hybrid cloud software and services expert has been lengthy and arduous, it’s poised for a significant payoff. Unlike its flashier counterparts offering consumer-facing AI products, IBM caters to billion-dollar enterprises with rigid security and data quality needs. Despite appearing slower in the AI race, IBM is steadily building a lucrative portfolio of long-term contracts with robust revenue streams. In the past two years, IBM’s stock has gained a modest 52%, trading at 14 times its free cash flows. As AI adoption accelerates among large enterprises, IBM is set to benefit significantly, making it a stock worth considering for patient investors.
Tech-Related Injuries: A Hidden Epidemic
Tech gadgets bring unparalleled convenience and entertainment to our lives, but they also pose serious safety risks. Data from the U.S. Consumer Product Safety Commission’s National Electronic Injury Surveillance System (NEISS) reveals thousands of ER visits annually attributed to popular consumer technologies like cell phones, hoverboards, and virtual reality headsets.
VR Headsets: Fun but Hazardous
Virtual reality (VR) headsets offer immersive experiences but can lead to unintended injuries. The NEISS data indicates that over 64% of VR-related ER visits were due to unintentional punches, often targeting family members or even the users themselves. These injuries highlight the physical risks associated with the immersive nature of VR gaming. Conversely, traditional video gaming injuries often stem from rage-induced punches on inanimate objects. Interestingly, VR-specific injuries lack the serious conditions like seizures or carpal tunnel syndrome associated with non-VR gaming, emphasizing the need for caution and spatial awareness while using VR.
Hoverboards and Drones: Wheels and Wings of Caution
Hoverboards dominate the list of tech-related injuries, leading to countless falls and collisions. Despite their popularity, it’s crucial to wear protective gear such as helmets to mitigate head injuries. Surprisingly, drones accounted for the fewest ER visits, suggesting their safer operation compared to the hazards of hoverboards.
Earbuds vs. Headphones: The Battle of the Littlest Injuries
Earbuds, especially their detachable tips, frequently become lodged in users’ ears, accounting for a significant percentage of headphone-related ER visits. Over-ear headphones pose fewer risks, though they can still cause accidents if cords get entangled with objects.
Cell Phones: The Pocket-Sized Dangers
Cell phones, ubiquitous in modern life, are surprisingly hazardous. Whether it’s dropping phones on one’s face, tripping while distracted, or cutting oneself on broken screens, cell phones contribute to numerous ER visits annually. Moreover, rare incidents like electrical shocks and spontaneous combustion remind us of the latent risks these devices carry.
Laptops and Tablets: Heavyweights and Lightweights
Tablets, being lighter, cause fewer injuries compared to laptops. However, laptops’ heft often leads to accidental drops on heads or feet, especially during travel. The NEISS data underscores the importance of handling these devices with care, particularly in crowded or mobile environments.
Conclusion
As we navigate the rapid advancements in AI and the increasing integration of tech gadgets into our daily lives, it’s vital to balance enthusiasm with caution. Investing in AI stocks like Dell and IBM presents promising opportunities, but conducting thorough research and staying aware of market dynamics is essential. Simultaneously, appreciating the potential hazards of modern tech gadgets reminds us to use these innovations responsibly. By doing so, we can maximize the benefits of technology while minimizing its risks.