Photo: Jeenah Moon\/Bloomberg ( Getty Images ) <\/p>\n
With tech companies and stocks buzzing amid a tight race in AI development, one economist is warning that the current AI hype has surpassed the 1990s dot-com era bubble. <\/p>\n
Are we in an AI bubble? | Whats next for Nvidia? <\/p>\n
The top 10 companies in the S&P 500 today are more overvalued than the top 10 companies were during the tech bubble in the mid-1990s, Torsten Slk, chief economist at Apollo Global Management, wrote on The Daily Spark. <\/p>\n
Slks warning comes after chipmaking powerhouse Nvidia became the first company in the semiconductor industry to reach a $2 trillion market valuation on Friday, driven by the boom in the AI industry. The previous week, Nvidia beat out Amazon and Google parent Alphabet to take the spot for third-most valuable company in the U.S. by market cap. The company saw its stock dip before fourth-quarter earnings as investors worried the rally had gone too far, but Nvidia beat Wall Street expectations when it reported revenues had increased 270% from the previous year to $22 billion. <\/p>\n
Accelerated computing and generative AI have hit the tipping point, Nvidia founder and CEO Jensen Huang said in a statement. Demand is surging worldwide across companies, industries and nations. <\/p>\n
After Nvidias earnings, some investors and analysts were similarly wary about what its performance means for the future. <\/p>\n
Another blockbuster quarter from Nvidia raises the question of how long its soaring performance will last, said Jacob Bourne, a senior analyst at Insider Intelligence. Nvidias near-term market strength is durable, though not invincible. <\/p>\n
Meanwhile, a study from Citigroup found the stock rally isnt necessarily something to worry about. <\/p>\n
The AI bubble is not in trouble, and, if anything, earnings performance suggests that it is less of a bubble to begin with, a team of quantitative strategists at Citigroup said. The group added that if a stock is boosted over 10% on an earnings day (Nvidias was up 16% on its earnings day), then those large-caps with strong performance into earnings continue to perform very well for the next three months. <\/p>\n
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The AI craze has companies even 'more overvalued' than during the 1990s dot-com bubble, economist says - Quartz<\/a><\/p>\n","protected":false},"excerpt":{"rendered":" Photo: Jeenah Moon\/Bloomberg ( Getty Images ) With tech companies and stocks buzzing amid a tight race in AI development, one economist is warning that the current AI hype has surpassed the 1990s dot-com era bubble. Are we in an AI bubble? | Whats next for Nvidia Continue reading