☕ Panic selling AI? Tesla? Google? Read this first, sport

Howdy from the PNW where it’s just after 0330 in the morning and following a super early conversation with Maria Bartiromo on FBN. (Watch) 

I want to take the proverbial bull by the horns. 

Futures are down on AI-spending fears on the heels of both Tesla’s and Google’s most recent reports. That is not only naïve as heck but absolutely on the wrong side of history. 

Let me be blunt. 

• Building transformative technology always requires massive upfront capital prior to monetization – a $5 word meaning you start making your money back. 
• It took a long time for computers AND the Internet to measure corporate productivity, revenue and, yes, profits. AI will follow the “Solow Paradox” which was postulated by Nobel laureate economist Robert Solow who famously noted that computers were “everywhere but in the productivity statistics” for decades.  
• Judging AI based on the early years ignores how network effects build upon themselves and will not stop how it reshapes our world. At the risk of sounding like a broken record, every business on the planet will adapt, adopt or die. 

While it’s true that ROI – return on investment – is concentrated in only 8-12% of the companies at present, that is always the way it works with new technology. It was the same with rail, steam, the telegraph, cell phones, computers, the Internet and more.  

AI critics and the bubble babblers are trumpeting the fact that 56% of CEOs are reporting zero cost savings or revenue growth is accurate. However, and in the same breath, it’s a sign of your own impatience if you’re falling for the hype being bandied around. 

Good luck with that. 

Every dollar spent now on AI may result in a 5:1 or even 10:1 return for the companies spending on it. 

What you really want to be asking yourself is, can you afford to miss that kind of profit potential???!!! 

I guaran-freaking-tee you that there is going to be a massive group of investors standing around a few years from now who miss out yet again “because nobody saw this coming”… just like the last time. 🤦‍ 

And I will do everything I can to make sure that you are NOT one of ‘em if I can help it. 

Click to enlarge image  

Every dollar spent now on AI means that it won’t be spent later. And that, in turn, implies massive jumps in profitability. 

As I noted to a particularly cantankerous critic recently, “okay sport, people made exactly the same statements about Amazon in the early days, Nvidia and even Tesla which has singlehandedly created more wealth in a shorter time than any other publicly listed stock in recorded human history. Tell me you want to miss that… or did you the first time around?” 

The silence spoke volumes. 

People tell me regularly that they won’t dare miss the next Palantir, the next AMD or the next Apple. Yet, that is exactly what many of ‘em are doing because they have the attention span of a gnat. 

Forget about AI for a moment. 

Ya wanna know why people really can’t get off the ball? 

Spoiler alert… this could sting if you’re one of ‘em. 

It’s the same old story. 

Patience and discipline are the two really truly undervalued assets in today’s markets.  

Always have been. 

Here’s a chart I shared with the One Bar Ahead® Family at this past weekend’s Shindig ’26, our annual conference. 

Click to enlarge image 

True value – and massively higher share prices – requires significant upfront investment and emerges after entire industries are reshaped, the competitive landscape changes and workflows are completely redesigned to incorporate new workflows, new products and services that are so early in the process that we don’t even have names for ‘em right now. 

As I noted to CNBC, “profitability is being sacrificed for infrastructure” just as it was previously at companies including Amazon and Netflix … I expect it to pay off in spades over the next 12-24, even 36 months.”  

How? 

Glad you asked. 

In Tesla’s case… 

• Unshackle FSD margins with FSD subscriptions and licensing – both of which potentially mean the incremental cost of delivery drops to zero unleashing software-like ROI. 
• Launch the Cybercab autonomous grid which means that every Tesla asset potentially generates near-continuous and interlinked cash flow. Taking a small cut on every autonomous ride bypasses traditional car ownership costs, boosts revenue and so on. 
• Scale Optimus for Tesla labor, not retail sales like most are thinking. The savings alone will boost factory margins and productivity by orders of magnitude. Then, Tesla will pivot to RaaS – robots as a service. 
• Energy… AI compute, X, SpaceX … all linked sooner or later. 

In Google’s case… 

• Google has a nearly unprecedented half a trillion-dollar backlog in cloud. Converting this to high-margin AI infrastructure, IaaS –  Infrastructure as a Service – provides an immediate pathway to 5:1. 
• Scaling B2B AI agents that charge for per-task services – like automated coding, customer service or medical diagnostics – bypasses human bottlenecks while boosting revenues and lowering expenses which – ta da – dramatically boosts margins. 
• Recognizing TPU – Tensor Processing Unit – sales means using custom silicon instead of paying 3rd party chip premiums which dramatically lowers the cost floor for AI computing power inside Google at the same time they are selling that externally. 

Again, we’ve seen this before, many times over. 

Examples include the mobile cloud buildout from 2010 – 2018 when Amazon, Microsoft and Google spent a combined $150B+ on high-capacity data centers while initial returns hovered in the low single digits.  

Once those were built, that enabled the rise of high-margin giants like Netflix, Airbnb and Uber while unlocking operating margins of 40%+ and an 8:1 return on investment for the original server footprint. 

There was also the Ad-tech shift of 2004 – 2016.  

Back then – in 2004, CapEx was just $318M but had risen to $10B by 2016. At the same time, that fueled total revenue to over $90.2B. 

I could go on but that’s moot. 

Here’s the bottom line. 

If you are panicking or even selling over a single report, you are not alone. 

But think dang it. 

If you are selling or worried, you fail to grasp the very essence of investment, not to mention the mechanics of how massive technology monopolies are actually made and fortunes built. 

History is very clear. 

I believe that there is another generation of millionaires being printed right now. 

Everybody dumping shares on a short-term basis is handing you an unprecedented discount on future profit potential. 

I’ve said my piece and need to go in search of some coffee. 

Now, it’s your move. 

So make it a GREAT one! 

You got this – I promise. 

Keith 😀 

PS: Speaking of great, I’ve got something really neat to share with you in the weeks ahead. Something that many of you have been asking about. Stay tuned – I believe that you’re gonna love it! 😊