r/investing
The AI bubble is literally the same thing as the dotcom bubble
The author argues the current AI stock market bubble mirrors the dotcom crash, predicting a correction despite AI's long-term value.
- Current AI stock valuations are driven by future potential rather than reasonable fundamentals, forming a bubble similar to the dotcom era.
- The stock market is expected to correct back to a reasonable level once the bubble deflates, likely after Anthropic's IPO.
Many people are probably thinking something like this: if ai is a useful technology then the current stock market valuations must be normal, not a bubble. But it is a bubble. And I'm leaning toward the idea that after Anthropic's IPO, it will start to deflate
There’s no denying that AI is a revolutionary technology, and nobody is going to abandon it. It's just like the internet: after the dotcom crash, people didn't stop using it, the same thing will happen with AI it will keep developing, but the stock market will correct back to a reasonable level. The technology itself isn't going anywhere
If we're valuing things purely based on future potentia then you might as well invest in unprofitable SpaceX, because someday, maybe 20 years from now, Elon Musk will build data centers in space. Or take the stocks of biotech companies that are using AI to discover new drugs, the potential is insane, so why aren't you buying their shares?