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Are We in an AI-Driven Tech Bubble? 🤖📈 Check out my new article discussing the potential parallels between today's AI investments and the late 90s tech bubble. What does this mean for investors and the future of technology? Join the conversation. #AI #TechBubble #Investing #Innovation

Is current AI Boom, the new Tech Bubble? 📈 - The graph below compares the 12-month forward P/E of the top 10 companies with the rest of the companies excluding the top 10, & the overall S&P 500 index during various years. - In 2000, at the height of the dot-com bubble, the P/E ratio for the top 10 companies was 24, significantly higher than 16 (which is the P/E of S&P 500 & the companies excl. the top 10). 💡This indicates a high concentration of valuations in the top tech companies during the tech bubble. - As of May 31, 2024, the P/E ratio for the top 10 companies is 27, surpassing the peak seen during the 2000 tech bubble. The overall S&P 500 P/E ratio is 19, and the P/E ratio excluding the top 10 companies is 18. 💡This suggests an even more pronounced concentration in valuation within the top 10 companies, currently, primarily driven by AI-related stocks. - While the overall trend indicates that the top 10 companies have consistently maintained higher P/E ratios compared to the rest of the market, the gap has widened significantly in 2024, reminiscent of the 2000 tech bubble. 💡This suggests significant investor enthusiasm & possibly overvaluation in AI-related stocks compared to the broader market & this high concentration of valuation in just a few top companies can be risky. Are we heading towards another bubble? Only time will tell, but understanding these trends is crucial for making informed investment decisions. #investment #AI #innovation #stockmarket #techbubble #economy #valuation #company Mitesh Shah Kirtan A Shah Chanchal Agarwal Nitesh Arora Ajay Sampath ✍: Hetvi Modi Bhurat

The Geeks Have Inherited The Earth Again!... AI stock frenzy helps mint 600,000 millionaires in the U.S., trouncing the rest of the world Artificial intelligence’s boost to financial markets helped the U.S. trounce the world in millionaire growth last year, when their ranks swelled by 600,000. That's more than the population of Baltimore, bringing the total number of Americans who have at least $1 million in investable assets, not including their primary residence, to 7.5 million, CNBC reported citing data from Paris-based consulting company Capgemini. Last year's 7.3% jump in U.S. millionaires helped North America reclaim the highest growth rate for millionaires in the world from the Asia-Pacific region. Asia saw millionaire growth of 4.8%, while Europe’s number of millionaires rose by 4%. The number of millionaires in Latin America increased by 2.7% last year and 2.1% in the Middle East. Africa saw a 0.1% decline, according to Capgemini. https://lnkd.in/gFZvYX3F

To the investment community: You've gotta be a little less short sighted. Look at history and the time to ROI for other high-impact technologies. It's as though modern investors aren't even educated on the Gartner Hype Cycle. I believe we are entering the "Trough of Disillusionment" phase, and that it will be one that is different than historical equivalents. First of all, y'all know AGI or ASI were never going to be an investment path towards quick and cheap returns. It's called the "Hype Cycle" because markets get too excited too quickly, NOT because the inherent potential of the new technology isn't there but because the time to ROI is not as immediate as investors expect. And that inherent potential can only be reached with continued investment. In this case, any "winners" must be in it for the long game - not a few quarters. Continuous investment over a few years is going to be a requirement to achieve AI that can perform all tasks flawlessly (especially physical ones). And though it's a requirement, it's not necessarily sufficient: As with historical examples, prices at the consumer level must be kept very low, forcing AI development into an even stricter standard of efficiency increase (at magnitudes never seen before) which the industry has indeed kept up with or surpassed, but raises the requirements for funding as well as possibly lengthening the time it takes to return on investments. On top of this, the internal and external demands for robust safety mechanisms and controls has upped the ante even more. So expectations are high. And so is the potential! But no market is mature overnight. And without getting overly technical, there is a lot of work to be done at the systems design and application architecture levels of AI applications to improve generalizability, online learning, adaptability to new/unseen tasks/data, memory, robustness, etc. While I am still a firm believer that GPT-4 was a turning point and most certainly marks the first convincing "sparks of AGI" (as Microsoft put it), there's work to do. And the development IS happening fast. And I haven't the time or space here to walk you through fine details, but spend a few hours looking at a. The advancements in humanoid robots using LLMs in the last year b. Advances in the last 6 months and less on improvements to reasoning abilities, from Stanford's "internal rationale generation" of Quiet-STaR or Metas multi token prediction techniques and even in small models like Phi-3, c. The rise of small models that are actually useful and have decent reasoning skills and are cheap to run d. Improvements to memory augmentation and RAG, from graph methods like HippoGraph, to integration of other types of networks such as xLSTMs or other RNN based networks (even liquid state machines or liquid-time constant networks) e. Good genAI video, etc TLDR: Stick with it. It's not about quick cash; it's about a new industrial revolution. It won't be overnight.

Bulls Are Out. Bears Have Gone into Hiding. “Global stock markets have recorded their best first quarter performance in five years, buoyed by hopes of a soft economic landing in the US and enthusiasm about artificial intelligence”, as per this FT article. The AI stuff is no doubt going to be revolutionary. Its prime time however, is much harder to predict. Despite many start ups venturing into new applications of this cutting edge technology, most companies still lack the proper infrastructure, architecture, integration, data strategy and governance required for AI to blossom. Without such foundations, AI will only ever help at the margin of the value chain and hence have limited impact. How long will it take for the ecosystem to deploy such foundations ? Hard to tell. However, being early is often the same as being wrong. #artificialintelligence #markets #bubble #management #data #strategy

Today’s AI boom mirrors the Dot-Com Bubble with two key similarities: - 🚀 Overvaluation of tech stocks, especially in AI and companies like Nvidia. - 📉 Increased speculative investments driven by hype rather than fundamentals. #AI #StockMarket #Investment - 📊 Investors should be cautious about overhyped stocks and assess their fundamentals. - 📉 Market corrections could be severe for overvalued sectors. - 💼 Diversifying portfolios can mitigate risks associated with speculative investments. Stock Market Crash: 2 Similarities Between Dot-Com Bubble and Today https://lnkd.in/gnXhtAxu

A must read if you want to get an expert and insightful view on the current and future market.

Palantir stock soars 20% in a month – Is $30 next for PLTR? Artificial intelligence (#AI) has been the standout trend in 2024, and investors are bullish on AI’s potential as significant tech players pour billions into the sector. Palantir Technologies (NYSE: PLTR), an AI leader, has seen its stock rise 40% year-to-date, with the most recent month bringing in 20% growth. https://lnkd.in/gjUfTSb8

Is #AI just another bubble? Or is it the smart investment for companies looking to increase productivity and business value? Here's a great article summing up why its not the same as the #dotcom #bubble:

AI megacaps are distorting the market. They have driven the US and global large-cap indices to outperform mid and small cap indices over the past three years. However, if you take a longer-term view you can see that this recent outperformance is unusual. For most of the last 20 years global SMIDs outperformed global large caps, only closing the gap when mega-cap tech companies surged. The incredible success of megacap tech has also led to the large-cap indices becoming increasingly concentrated in technology as this chart shows. In 2014, the technology concentration of all three indices was reasonably similar, however now in May 2024 technology makes up more than 30% of the S&P 500 and 25% of the global large cap index. The global SMID index has stayed relatively consistent, rising from 12% to 14%. Vaughan Nelson Portfolio Manager James Eisenman thinks all investors should be aware of, and adjust to, the new market dynamics: “Due to the incredible success of the AI-related megacaps the stock market has changed significantly in a short period of time and all investors should be looking at their investment portfolios and deciding whether they need to adjust or rebalance them to align with their investment plans. These market movements have also created great opportunities for active managers and stock pickers to out-perform their benchmarks over the long-term. Any big market changes are opportunities which active managers and astute investors can capitalise on. This year we have been able to open positions in companies that will benefit from the success and growth of AI, but are trading at much lower multiples.” Link to the full article in the comments #ai #globalequities #smallcaps