Everyone Is Chasing AI. I’ve Been Buying What It Left Behind
“Dying” companies that were once "high-flyers", especially the ones sitting on massive amounts of user data like SMS, emails, and even physical addresses, are where I think attention should be focused in the world of AI investing.
Many of these companies like Webull, Snapchat, Pinterest, Groupon, Nextdoor, and many others are likely worth far more than most people think.
It gets even more interesting when they have a healthy balance sheet with a lot of cash and little debt. That gives them two paths. They can figure it out themselves, or they become very attractive acquisition targets.
This user data is incredibly important.
Maybe these companies cannot figure it out on their own. But someone else can. Or at the very least, someone else can extract a lot of value from millions of emails, phone numbers, and addresses.
AI makes re-engaging this data (SMS, email, addresses) cheaper, more targeted, and far more effective than it used to be.
Another piece people overlook is cost structure.
A lot of these companies are bloated. In a world where AI can replace large portions of the workforce, many of them could likely operate with a fraction of their current headcount. Some will make that transition, cut costs aggressively, and turn the business around. Others will not, and will instead get acquired at a premium to their market cap because of the value of their data.
A perfect real-world example of this is Stock Analysis. The company I work for is doing what many others in the space aim to do with just a handful of employees, while competitors have hundreds.
This is what you want to look for.
Companies that have been beaten down. Companies that were once market darlings. Companies that still have valuable intellectual property and user data. Companies with either strong balance sheets or a clear path to cleaning them up.
I think there will be a lot of 3x, 4x, 5x, and even 10x+ winners among publicly traded companies that fit this mold.