Stocks fall after “perfect” earnings, which is usually when the biggest opportunities begin to appear…
Listen to the audio version of this article (generated by artificial intelligence).
Tom Young here with today Smart money.
Imagine waking up one morning to find that your bank account is drained… your phone is locked… and your passwords no longer work.
Meanwhile, the systems you depend on every day — payments, communications, and even parts of the power grid — begin to malfunction or stop working.
No warning. There is no explanation. There is no clear entry point.
Just a mess.
This is what could happen if hackers armed with artificial intelligence exploited “zero-day” vulnerabilities – hidden flaws in software that no one knew existed and, therefore, had Zero days To repair.
On April 7, Anthropic released a limited edition of Claude Mythos, an AI system so powerful that the company immediately restricted access to it.
Mythos exposed these zero-day vulnerabilities in every major operating system, including those that had gone undetected for 27 years.
Hackers can exploit these hidden vulnerabilities to steal data, take control of computers, disable critical infrastructure, and much more.
Anthropic did not program Mythos to do this. Hacking skills appeared on their own.
As the company itself explains: “We did not explicitly train Mythos to have these capabilities. Rather, they emerged as the end result of general improvements in code, logic, and autonomy.”
The reaction at the highest levels was immediate. Federal Reserve Chairman Jerome Powell and Treasury Secretary Scott Besent held a closed-door meeting with top bank executives to discuss risks to the global financial system. Shares of major cybersecurity companies fell by double digits.
However, most people missed the story. War in the Middle East… Gas prices… Tariffs… The usual noise is drowning out what could be the most important technological development of our generation.
Because Mythos is not just a better chat software. It’s a sign that AI has crossed an important threshold, moving from a tool that responds to instructions… to a tool that can act, adapt and solve problems on its own.
This changes everything for your wallet…
This transformation is already underway
To understand why the mythos is important, you have to understand what was building underneath it.
A new kind of AI that doesn’t just respond to prompts… but can perform complex tasks on its own.
A year ago, a Chinese startup called Manus AI introduced a system that can analyze financial transactions, screen job candidates, and navigate complex digital workflows without needing step-by-step human input. retired New York Times Described by author Craig S. Smith called it a “game changer.”
This has forced every major Western AI company to respond. Within months, OpenAI and Anthropic released similar systems capable of handling multi-step tasks, managing workflow, and making decisions with minimal supervision.
Then came OpenClaw last November, a free, open source platform that has grown to 30 million monthly users. in Nvidia company (NVDA) GTC conference, CEO Jensen Huang described it as “potentially the most significant software release… perhaps ever.”
These are not chatbots. They’re digital workers – handling emails, transferring files, managing information, writing code, reviewing contracts… and doing it around the clock without asking for a raise.
I’ve seen this myself. With CloudCode, I can now present raw financial data to an AI assistant and have it build a quantitative model. It runs on its own to write thousands of lines of code. Then he tests the model… critiques it… requests more data… and suggests improvements. A robotic mechanized suit no longer requires a human pilot. It’s the entire machine, replacing entire teams of analysts and programmers.
And if I could do that as a single analyst, imagine what Anthropic’s 1,500-person engineering team came up with when they used these tools for themselves…
So, even if Mythos isn’t the endpoint, it represents a clear change in what these systems can do. New generations of AI models typically appear six to 12 months after a major launch, and I wouldn’t be surprised if “Mythos V2” arrives by December.
Why might your “safe” AI stocks be the most at risk?
This is where things get uncomfortable.
The same technology behind Mythos is now dismantling the business models behind some of Wall Street’s most popular stocks.
On February 4, Anthropic released a legal plugin for CloudQuerk. The impact on Wall Street was immediate.
- shares Thomson Reuters Company (tripartite) Decreased by 19%.
- Parent LexisNexis Relex plc (Resting) Decreased 15%.
- LegalZoom.com (LZ) It crashed 20%.
Wall Street has dubbed this the “SaaSpocalypse,” the ongoing collapse in software-as-a-service (SaaS) stocks that has now spread beyond legal tech.
Will AI replace customer service platforms?
Real estate brokers?
Financial services?
Business automation?
This fear is not misplaced. For 15 years, the SaaS profit machine has worked like this: Build a dashboard, link it to a database, and charge companies $30 to $100 per month per employee to use it. The more workers a client hires, the more profitable software companies will be. And no one has questioned the 95%-plus gross margins that these companies routinely earn.
But A-AI doesn’t need dashboards. It connects directly to core systems, pulls data, updates records, and triggers next steps automatically. When one A-AI can do the work of five junior analysts or paralegals, companies don’t just need fewer employees. They need fewer software licenses.
And if these systems are powered by a model as powerful as Mythos, the pressure on SaaS business models can accelerate very quickly.
Meanwhile, the companies you expect to benefit from it — pure AI names — are trading at valuations that assume perfection.
We’ve seen this movie before during the dot-com hysteria. Many desirable internet lovers like Cisco Systems Inc. (cisco)Lucent and AOL failed to succeed…as did companies like Borders and Circuit City, which were disrupted by the Internet era.
So, the question is not whether AI is a big problem.
This debate is over.
The question is: As investors, how can we profit?
The next artificial intelligence computation
My colleague InvestorPlace Eric Fry It is believed that the great profit opportunities will be in the “applicants”. These are not the companies that build AI. They’re the ones using it to transform entire industries.
Think sensors, robots, industrial systems, and security infrastructure. Companies with data edges that are difficult to replicate and real-world integration that cannot be coded away.
He sees this “AI computation” as a major inflection point. He believes that in the coming months we will see a shift in wealth from those who own the wrong stocks to those positioned in applied AI companies that connect this digital technology to the physical world.
He prepared a free presentation It goes much deeper than I can here – naming specific stocks he believes are most at risk, and stocks that are capable of catching the upside as this shift accelerates.
The scenario we started with may seem extreme.
But the forces behind it are already there, and they are beginning to reshape which companies will win and which won’t.
If you own any AI-adjacent stocks (and at this point, who doesn’t?), it’s worth it See what he found – Especially before this shift becomes more apparent to the broader market.
Thomas Young, CFA
market analyst, Investor location
note: Many investors believe that AI’s biggest gains are already behind us. Eric Fry He thinks the opposite might be true…but only for a select group of companies that most people don’t even see. In his latest presentation, he explains why some of today’s biggest winners may struggle from here, and how a lesser-known group could make big gains in the next leg of the cycle. It’s worth a watch if you haven’t seen it yet.
