The AI bubble has further to run despite the looming crash
TL;DR
The Guardian argues that the AI bubble may keep inflating even as crash risk rises. The driver is not just hype, but a mix of real tech profits, investor FOMO and a huge pool of savings looking for returns. The article focuses on the S&P 500, Nasdaq and heavy concentration in the Magnificent Seven: Amazon, Alphabet, Nvidia, Meta, Microsoft, Apple and Tesla. It says the ten largest S&P 500 firms now make up about 40 percent of the index.
Nauti's Take
Here is the uncomfortable truth for AI builders: the market can be irrational and profitable at the same time. Stare only at valuations and you miss opportunities; build only on momentum and you are standing on sand.
Cash flow, real usage and low dependence on the Magnificent Seven become survival traits.
Briefingshow
The issue is not whether AI matters, but whether current valuations have pulled too much future growth into today’s prices. When a small group of giant tech stocks carries major indexes, a sector story becomes a pensions, ETF and global-market risk. The dangerous part: as long as profits stay strong, markets can ignore warnings for a long time.
Sources