Navigating AI Investments: The 'Follow the Usefulness' Framework
Saxo Bank's 'Follow the Usefulness' framework aids traders in distinguishing sustainable AI investments from speculative hype, emphasizing customer growth and measurable revenue metrics.
Introduction to the Framework
On May 8, 2026, Saxo Bank released the 'Follow the Usefulness' playbook, a pivotal tool for traders in the advancing landscape of artificial intelligence investments. This framework facilitates the transition from speculative AI hype to a more grounded focus on fundamental AI economics.
Key Insights from Recent Market Movements
One significant trigger for this framework's introduction was Datadog’s (DDOG) outstanding performance on May 7, where shares soared by 31.3% in a single trading day. Highlights from their earnings report included:
- 32% year-over-year revenue increase resulting in a total of $1.01 billion
- Revised full-year 2026 revenue guidance raised to up to $4.34 billion
- An impressive 21% growth in high-value enterprise customers, defined as those spending over $100,000 annually
These figures emphasize the importance of metrics that indicate 'AI observability' as a solid revenue driver, which is a core principle of the new trading framework.
Importance for Traders
As the AI market matures and becomes increasingly volatile, the 'Follow the Usefulness' framework serves as a crucial educational tool. Its primary benefit is to help traders differentiate between companies that display genuine revenue durability and those merely leveraging 'AI labels' for momentary gains. Here’s why this framework matters:
- Focus on Economic Utility: Traders are encouraged to isolate companies based on observable economic contributions rather than speculative excitement surrounding AI technologies.
- Usage-Based Revenue Models: Emphasizing companies that have substantial usage metrics in their revenue models allows traders to gauge the sustainability of a company's growth.
- Risk Management: By tracking customer expansion and cash flow, traders can manage risk more effectively, particularly in high-valuation growth sectors.
To thrive in the investment landscape of 2026, traders need to adopt a mindset that prioritizes substantial fundamentals over entertaining stories that lack financial support.
Conclusion
The 'Follow the Usefulness' AI investment framework represents a strategic pivot for savvy traders looking to navigate the complexities of AI-driven stocks. Focusing on essential metrics such as revenue growth and customer expansion is not only wise but necessary for achieving durable success in a market that is continuously evolving. As traders step into this new era, engaging with concrete data will be their strongest ally in distinguishing transient trends from lasting economic realities.