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I’ve been reading a lot of AI investment posts on Substack lately, and most of them are very bullish based on revenue growth and product momentum. On the surface many of these companies look like strong opportunities, but it’s getting harder to understand what’s actually sustainable versus what’s just narrative-driven growth. How do you evaluate AI companies when most of the available analysis feels too high-level?
The problem with a lot of financial content online is that the people writing it have skin in the game and the takes end up being more promotional than analytical. AI companies specifically are tough because the product cycles move so fast that anything written a few months ago is basically outdated. Gross margins and actual customer retention numbers tell you more than revenue growth headlines. A lot of these outfits look great on top line until you realize most of that revenue is tied to a handful of enterprise contracts signed during the hype cycle. The compute costs side is what people gloss over too – burning through GPU spend at a rate that makes any path to profitability pretty theoretical.
A lot of the Substack newsletters on AI investing are written by people who are either already in the positions they’re covering or building an audience around being bullish. Neither of those incentives produces the kind of objective analysis you actually need before putting real money in. Better to commission research on a company first, like through First Strike Research https://firststrikeresearch.org/ . They dig into the fundamentals rather than the narrative and give you something you can actually base a decision on. That way you’re not buying a story someone published to drive subscriptions.
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