NEW YORK — Wall Street analysts announced this week that the artificial intelligence boom has entered a more advanced phase in which companies can increase earnings simply by owning stakes in other companies that everyone has recently agreed are worth more.
The breakthrough follows a wave of mark-to-market gains tied to investments in private AI firms, allowing companies to report stronger results without the traditional burden of selling additional goods or services.
“This is a major productivity improvement,” said one analyst. “In the old economy, you had to manufacture something, find customers, collect revenue and control costs. Now another investor can just show up at a higher valuation.”
Under the emerging model, Company A invests in AI startup B. Company C later invests in B at a higher valuation. Company A then records a gain, boosting its earnings and potentially its own stock price, which may encourage Company D to invest in A.
Analysts said the system could become effectively self-sustaining as long as every company continues believing every other company is becoming more valuable.
Several banks have reportedly begun updating valuation models to replace discounted cash flow analysis with a simpler methodology based on asking, “Who invested last?”
At press time, markets were awaiting the next funding round needed to confirm that all previous funding rounds had been correct.
Inspired by:
Reuters - "Gains in AI company stakes juice second-quarter earnings for S&P 500" (August 20, 2026)
