"Stop worrying about the bubble in AI-it's growth is sustainable, three Wall Street analysts from Goldman Sachs, JPMorgan, and Wedbush argued this morning in notes seen by Fortune. Traders seem to agree, at least for now. Futures contracts for the tech-heavy Nasdaq 100 were up 55% this morning prior to the opening bell, after the index closed up 0.68% yesterday. The index is up 18% this year, despite worries that the AI boom bears a resemblance to the dot-com bubble of 2000."
"The index is up 18% this year, despite worries that the AI boom bears a resemblance to the dot-com bubble of 2000. Hemant Taneja, CEO of VC firm General Catalyst, was quoted in the Financial Times this morning saying: "Of course there's a bubble ... Bubbles are good. Bubbles align capital and talent in a new trend, and that creates some carnage but it also creates enduring, new businesses that change the world.""
"We should all stop worrying and learn to love the AI boom, if new research from Goldman Sachs is correct. In a note titled "The AI Spending Boom Is Not Too Big," Joseph Briggs and his colleagues say "anticipated investment levels are sustainable, although the ultimate AI winners remain less clear." The Goldman team argues that when deployed properly, the productivity gains from AI will far exceed the investment currently going into it."
Three Wall Street analysts from Goldman Sachs, JPMorgan, and Wedbush contend that the AI investment boom is sustainable. They expect productivity gains from AI to far exceed current spending while capital expenditure on data centers and chips remains robust. Market sentiment has driven Nasdaq 100 futures sharply higher and the index is up 18% year-to-date. Venture capital firms have invested $161 billion in AI startups this year, and ten startups now have a combined valuation near $1 trillion despite lacking profitability. One VC leader described bubbles as aligning capital and talent, creating both carnage and enduring new businesses.
Read at Fortune
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