The high demand for AI stocks has raised concerns about a potential bubble, as many investors are pumping money into AI technologies. However, renowned economist Jeremy Siegel believes that the time for a bubble is not yet over.
As technology continues to boom, investors are betting big on the potential of artificial intelligence (AI). While some have expressed concern about a possible bubble forming in the AI market, Jeremy James Siegel, a noted economist, and Russell E. Palmer, professor of finance at Wharton University in Pennsylvania, remain optimistic, stating that It’s not a bubble yet.
in one Interview With CNBC on Monday, Siegel revealed that the current situation is different from the dot-com bubble of the late 1990s, referring to the period between 1995 and 2000 when investors flocked to Internet-based startups in hopes of higher returns. But met with market failures. instead.
The Wharton professor said he is getting questions about whether increased interest in AI will lead to a repeat of the dot-com bubble.
Nvidia reports impressive first quarter earnings driven by interest in AI
Siegel believes the current excitement around AI is driven by two things: interest in the technology and the success of companies like Nvidia, a leading provider of AI chips. Nvidia, a US-based multinational tech firm, recently informed of Strong earnings in the recently ended quarter. This led to a 24% jump in its shares to reach an all-time high.
Demand for Nvidia’s chips in AI applications has skyrocketed, pushing the company’s market capitalization near $1 trillion. During the earnings call, Nvidia CEO Jensen Huang affirmed the growing demand for its data center products. Year-to-date, Nvidia shares are up an impressive 166%.
While the Wharton professor acknowledges that Nvidia’s shares may be slightly overvalued over the long term, he stresses that momentum could take the shares far above their fundamental value in the short term, noting that it anticipates It’s hard to see how high these stocks can go.
,[In the] long time i will say that [Nvidia shares] Might have been a bit overpriced. But over the short term, we know momentum can take stocks far above their fundamental value, and no one can predict how high they can go,” Siegel said.
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Since the launch of ChatGPT, a generative AI chatbot designed by OpenAI, in November last year, interest in such technologies has skyrocketed, fueling fears that AI could replace humans.
Companies like Adobe and Activision Blizzard have recently joined the AI bandwagon to empower human creativity.
Earlier this month, Adobe City: Its “Generative Fill” AI to support graphic designers using Photoshop to create unique content. Like Adobe, Blizzard also plans to introduce an image-creation system to assist humans.
E-commerce giant Amazon in April announced The launch of its “Amazon Bedrock”, which provides users of Amazon Web Services (AWS) with the opportunity to build their own generative AI technologies using its Foundation Models (FMs).
The company aims to make AI development more accessible by providing a secure online service that enables corporate entities to build their own applications.
Amazon claims the new service can run AI software more effectively and affordably than other competitors, aiming to make AI technology available to a wider range of businesses.
In addition to e-commerce giant Amazon Bedrock incorporated AI came into its platform to improve the delivery speed. The new tool will assist customers in locating the nearest warehouse of the products the customer needs.
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