Artificial intelligence continues to stir up the stock market. After Nvidia’s latest statements, the value explosion caused by artificial intelligence creates a question mark in the minds. Wharton professor and renowned economist Jeremy Siegel supports leading technology firms fueled by artificial intelligence despite “bubble” concerns.Artificial intelligence is not a bubble
The AI chip craze, driven by the demand for AI-powered chatbots like ChatGPT and the high-powered graphics processing units used to train these chatbots on supercomputers, has left investors piled on some stocks and others timid with bubble concerns.
“It’s not a bubble yet,” said economics professor Jeremy Siegel of the appreciation. He said he also received questions about whether this could lead to a repeat of the dot-com bubble of the late 1990s.
Economist David Rosenberg, known for his opposing views, predicted that the current AI boom could collapse like dot-com stocks in the late 1990s. The dotcom bubble had burst following the massive adoption of the internet, with capital running dry and the proliferation of available venture capital for internet-based companies, particularly startups without a track record of success.
“No one can predict how high they can go”
“First, there was excitement about AI, and Nvidia confirmed that excitement with explosive earnings. That’s a double push,” says Siegel.Nvidia’s shares rose 25 percent for watches after the firm announced better-than-expected results last quarter and hit an all-time high as demand for Nvidia chips used in artificial intelligence exploded. Demand for Nvidia shares has grown so much that the company’s valuation has reached almost $1 trillion. Nvidia shares rose 166% year-to-date.
“I’d say Nvidia stock is probably a little overvalued in the long run,” Siegel said. He even told Siegel that AI stocks helped boost the S&P 500, saying that “the United States could profit from the banking crisis.”
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