The AI bubble has further to run despite the looming crash
TL;DR
The Guardian argues that the AI boom looks overheated but may keep running because Big Tech still earns real profits and investors remain driven by FOMO. The focus is on the S&P 500, Nasdaq and the Magnificent Seven: Amazon, Alphabet, Nvidia, Meta, Microsoft, Apple and Tesla dominate the US market. Warning signs include massive AI spending, fresh borrowing and extreme concentration: the ten biggest S&P 500 firms reportedly make up about 40 percent of the index.
Nauti's Take
The useful takeaway is not: AI is a bubble, so stay away. The useful takeaway is: AI can be technologically real and still be overpriced as a market story.
Treating every new model release as automatic proof of higher valuations confuses product progress with business model strength. The durable winners may not be all of today’s market favorites, but the companies that turn AI into cheaper operations, stronger distribution or services people actually pay for.
Briefingshow
This is not a classic hype cycle with no revenue. It is a hype cycle with real cash flows, political support and a huge pool of capital looking for returns. That makes it more dangerous: the party can last longer than skeptics expect, while the eventual damage grows because pensions, ETFs and corporate valuations become tied to the same small set of AI bets.
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