"Bubbles are hard to predict You never know if there has been a bubble until after the event, says Daniel Casali, the chief investment strategist at the wealth management company Evelyn Partners, and if Guardian Money could predict the peaks and troughs in the stock market you would be the first to know (shortly before we all cashed in and retired)."
"Some commentators suggest investors are currently paying too much for technology stocks because of misplaced expectations about how much the companies will make from developments in AI. However, others argue that this is not the case. Bankers at UBS, for example, had positive predictions for AI in their year ahead report. Acknowledging risks in the sector, they pointed to the capacity for much more spending on the technology. This could underpin further gains for AI-linked shares in 2026, they said."
Share prices boomed at the end of 2025 amid warnings that growth may be driven by overvalued technology stocks and fears of an AI bubble. Prominent figures, from central bankers to tech executives, have voiced concern, and many investors have at least indirect exposure to AI-related companies. A collapse in AI valuations could drag down other company values. Market experts note that bubbles are only identifiable in retrospect, opinions differ on current valuations, and some banks predict further spending could support AI-linked shares. Rapid AI development means setbacks and breakthroughs could both occur, making timing uncertain.
Read at www.theguardian.com
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