Santoli: The youthful phase of AI is over. What it means for investors

Get Mike Santoli's Market Memo in your inbox first. SUBSCRIBE HERE"We'll never laugh again," said a young admirer of John F. Kennedy in 1963 as she mourned his sudden death."We'll laugh again," answered the JFK aide Daniel Patrick Moynihan. "It's just that we'll never be young again."At the risk of seeming to conflate a president's assassination with an investment motif, this is where the AI theme sits right now. There will be cheer and thrills and profits generated by the burgeoning technology in the years to come. But the youthful phase of AI - when promise was unlimited and winners were easy to spot and vastly outnumbered losers - is over. This reality predates the past week's litany of ominous pronouncements about the destructive potential of AI models and the industry's professed desire for some restraint on the velocity of development. Semiconductor shares were already 20% off their June highs prior to Monday's 4% slide. The tech sector of the S&P 500 has seen its forward price/earnings multiple contract from 29 to 21 in the past year with the market unwilling to extrapolate the profit surge in the absence of a clear path back to reaping oodles of free cash flow. Data cen...