Earnings keep telling the same story.
Artificial intelligence is real. It is not fading. It is building.
Each quarter shows more proof as American businesses use these tools in clear and practical ways.
A common story claims we are in an AI bubble.
Nervous nellies repeat it, and Mr. Market believes it.
It says trillions are being spent, yet little is showing up in real productivity or bottom-line results.
That story sounds neat. It also grows more incorrect with each passing month.
Fresh research from Zhejiang and Columbia universities shows how powerful generative AI can be when used inside a normal retail business.
The study, titled Generative AI and Firm Productivity, produced some of the clearest evidence so far.
When an online retail platform added an AI assistant before checkout, revenue rose by 16% while the share of visitors who became buyers jumped by close to 22%.
A comparison that tested a hybrid AI system against a team of trained human agents showed an 11.5% increase in sales.
AI tools help American small firms work smarter
These are not marginal improvements. They are real gains inside a real business.
This matches what we have seen in several industries.
At large banks, AI supports analysts by completing heavy research tasks and filtering information quickly.
At insurance companies, AI sorts claims data so adjusters can focus on higher-value decisions.
The pattern stays the same.
AI does not replace skilled workers. It raises their productivity and frees them to focus on the most important tasks.
Stores with fewer products, fewer customers, and less experience on the platform, according to the study, saw the biggest boost.
Newer buyers saw a strong lift as well. These buyers are still learning how to navigate the site and often have trouble finding what they want.
AI smoothed the process for both groups.
It closed gaps that once held small operators back and gave them a real chance to compete and succeed.
Many people think only the biggest companies will gain from AI, yet the evidence points in the opposite direction. Our economy grows healthiest when small businesses get tools that help them raise sales and lower costs.
AI is already doing that.
Strong Tailwinds Lift Firms Using AI
Here are the practical implications for investors.
The value of AI is already showing up in the most ordinary places. Customer service. Product recommendations. Translations. Better matching between buyers and sellers. These small improvements will scale throughout the economy and can produce meaningful changes in productivity.
The winners of the AI theme will not be limited to companies building the infrastructure. Many of the largest rewards may come from companies that use AI to improve operations. Study after study shows that companies implementing AI have outperformed those that have not. The market is not guessing here. It is reacting to real results.
This supports the core of our American Prosperity approach.
We look for long, rising tailwinds that lift great businesses year after year. Artificial intelligence is one of the strongest tailwinds of our time.
Our AI-focused holdings continue to fire on all cylinders because they sit in front of this massive spending cycle.
Many companies sit at the center of this wave, building the data centers, cooling systems, chips, and power infrastructure that make AI possible.
Their earnings reflect real demand. Their backlogs keep growing. Their cash flows keep expanding.
The AI bubble story keeps spreading. It fits neatly with memories from the dotcom era. But the comparison breaks down the moment we look at the numbers.
During the dotcom boom, a huge share of spending came from small speculative companies. Today, the vast majority of AI investment comes from large, profitable firms with deep experience and giant customer bases.
S&P 500 capital spending takes up a bigger share of GDP than it did twenty years ago, yet a better measure tells a clearer story.
Capital spending uses only about 40% of operating cash flow today.
During the dotcom craze, it took more than 70%.
That means American companies are investing in AI from a position of real strength. They are not chasing dreams. They are putting steady cash flow into projects that already show real results.
This is why our approach stays focused on fundamentals. When we own companies tied to a rising tide of real demand, we do not need hype. We only need patience.
The returns from AI have been visible in the earnings of infrastructure firms for some time.
What is becoming clearer is that these gains will spread across the rest of the economy. Higher productivity. Better customer service. More efficient operations. Stronger sales.
The narrative will keep shifting.
Skeptics will keep pointing to the past. Yet the American economy continues to prove its strength. The combination of innovation, capital, and hard-working people has carried this country through every major transition.
Artificial intelligence is no different. It is already creating value. It is lifting businesses of every size.
And the companies at the center of this wave continue to deliver results that speak for themselves.
That is the heart of our American Prosperity approach.
Focus on the strongest tailwinds. Own the best businesses. Stay patient. And keep your eyes on the long rising path of American growth.
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Regards,
Charles Mizrahi
Prosperity Insider
