Artificial intelligence (AI) is one of the most significant technological advancements of recent years. And it could very well have the potential to disrupt global industries. Granted, the potential multi-billion-dollar industry is exciting to watch, but it could also eventually and easily pose a threat to millions of jobs and industries. At the highest risk are large technology-based sectors, video streaming services, and healthcare to name just a few. In fact, below are some of the companies that are being impacted. Before long, they could all find themselves on the hot list of stocks to sell.
Stocks to Sell: Ubisoft (UBSFY)
Shares of gaming company Ubisoft (OTCMKTS:UBSFY) could drop with the further advancement of AI applications. The game development industry is seeing changes as developers raise the bar for quality thanks to AI. The technology is allowing them to compete with big companies like Activision Blizzard (NASDAQ:ATVI) and Ubisoft. To maintain competition, companies like Ubisoft will have to cut staff and close offices around the world, which could lead to a delay in the development of games. That could then result in lower sales and, as a result, poorer financial performance.
In addition, Ubisoft is going through hard financial times. In Jan., the stock dropped after it slashed its forecasts and revealed that Christmas sales were slower than expected. Its caution tells me the industry is beginning to feel the impact of macroeconomic pressures.
Streaming services, such as Netflix (NASDAQ:NFLX) are also at risk. Many professions related to the film industry can be replaced by AI, including programmers, copywriters, illustrators, and designers. Netflix is also facing backlash on social media for using AI to create an anime instead of employing human artists, especially since the company’s American studio had laid off 30 employees. The situation is made more concerning by the fact that last year Netflix’s Japanese division did not declare ¥1.2 billion ($9.3 million) in profit over three years and was subsequently fined approximately ¥300 million ($2.3 million), including the undisclosed amount.
Meta Platforms (META)
Social media companies like Meta Platforms (NASDAQ:META) and Twitter have faced criticism over their use of AI algorithms to curate and recommend content. Concerns have been raised about the potential for these algorithms to perpetuate bias, spread misinformation, and compromise user privacy. There have also been concerns about the lack of transparency in the decision-making process behind these algorithms.
META was even forced to put a hold on the development of its AI system -— Galactica mid-progress — with concerns over the communication methods used by the bots. As a result, hundreds of employees were cut, with the company losing millions of dollars spent on development. Though Meta Platforms’ product line is not limited to AI, its failure to establish a strong position could make META one of the top stocks to sell.
On the date of publication, Julia Magas did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.