The current AI-led “baby bubble” could be seen as a positive or a negative depending on the perspective. On the one hand, it is a sign of progress and innovation, with technology giants such as Microsoft, Nvidia, Apple, Alphabet, Meta, Amazon, and Tesla leading the way. The stock prices of these companies have boomed this year, suggesting that investors are bullish on the future of AI.
On the other hand, there are some who are warning that the investor hype for AI could be short-lived and that the market could be heading for a significant correction. Bank of America's Michael Hartnett has compared the current AI boom to the dot-com bubble of the early 2000s, where the Nasdaq Composite plummeted 78%. UBS's Art Cashin and veteran economist David Rosenberg have also drawn parallels with the dot-com bubble.
Ultimately, it is difficult to know for sure whether the AI-led “baby bubble” will burst or if it will continue to grow and drive the stock market higher. It is important to remember that, while AI has the potential to revolutionize many industries, it is still a relatively new technology and there is a lot of uncertainty and risk associated with investing in AI-related stocks. As such, it is important for investors to do their due diligence and be aware of the potential downsides before investing in AI stocks.
(https://ca.finance.yahoo.com/news/ai-led-baby-bubble-bursting-020103566.html)
What lessons can be learned from the dot-com bubble that could be applied to the current AI stock boom?
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