This Big Bank Sees "AI Bubble" Risk. 2 AI Stocks That Could Be Spared
Briefly

Markets exhibit rising concern about an "AI bubble" as valuations climb and the S&P 500 concentrates in a few large tech names. Some strategists raised price targets even as skepticism grows among retail investors worried about rising P/E multiples and comparisons to past tech manias. Both sharp corrections and prolonged underperformance for years are plausible outcomes given current froth. Staying invested is offered as a reasonable course given the unknowability of near-term market direction. Cheaper Mag Seven names like AAPL and META are noted as potentially more resilient if a correction in AI stocks occurs.
We've heard a lot of "AI bubble" comments in the past couple of months as the broad stock markets continued to march higher, forcing some less bullish market strategists to increase their price targets on the S&P 500. While I believe it's a good thing for the masses to be skeptical, I don't think acting as though one knows what will happen next in the near term is a very good idea.
Are valuations getting a tad excessive? Perhaps. But we don't know when and how the froth will be dealt with. A market crash and the bursting of the bubble could certainly happen. However, a more benign scenario could also unfold, where the S&P 500 lags behind for a decade or more. Perhaps it's best to simply acknowledge that the future is unknowable with AI and that it's better to just stay invested.
Read at 24/7 Wall St.
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