Why Investors Are Asking About an AI Bubble
Someone asked me recently whether there's an AI bubble. My short answer was, "It sure looks like one to me." But the reasons matter more than the answer. AI does some genuinely amazing things, and I use it all the time. What makes me wary is how familiar the behavior around it feels. Many investors don't just own their AI stocks. They love them. And when you love a stock, it's hard to stay objective about what it's worth.
Past booms, like Japanese stocks in the late '80s, dot-com stocks in the late '90s, and housing in the mid-2000s, leaned on ideas that started out true. The internet did change the world. But being right about a technology doesn't make every price worth paying. Cisco was a real business with real profits in 2000, and its stock took roughly 25 years to get back to its 2000 high.
Nobody, including me, can tell you when a bubble ends. Alan Greenspan warned about "irrational exuberance" in 1996, and the dot-com boom ran for more than three years after that. So instead of trying to time it, ask yourself this: if AI stocks have become a big part of what you own and this does turn out to be a bubble, what would that mean for you? If that question makes your stomach drop, let's talk Get in Touch — Sound Investment Strategies | Fee‑Only Advisors. This is my opinion, for education only, and not a recommendation to buy or sell any security.
