{"id":245530,"date":"2026-01-15T05:43:13","date_gmt":"2026-01-15T05:43:13","guid":{"rendered":"https:\/\/www.newsbeep.com\/ie\/245530\/"},"modified":"2026-01-15T05:43:13","modified_gmt":"2026-01-15T05:43:13","slug":"ai-bubble-anxiety-is-everywhere-but-are-valuation-concerns-overstated-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ie\/245530\/","title":{"rendered":"AI bubble anxiety is everywhere, but are valuation concerns overstated? \u2013 The Irish Times"},"content":{"rendered":"

This year has begun much as 2025 ended, with a steady drumbeat of warnings about an AI <\/a>bubble.<\/p>\n

Investors see an AI crash as the market\u2019s biggest tail risk, according to Bank of America\u2019s latest fund manager survey, while more than half described the magnificent seven as Wall Street\u2019s most crowded trade.<\/p>\n

Investor angst is reflected in headlines, ranging from the Wall Street Journal (\u201cWill stocks crash in 2026?\u201d) to Bloomberg (\u201cIs the AI boom a bubble waiting to pop?\u201d) to Futurism (\u201cTerrified investors are bracing for an AI bubble \u2018reckoning\u2019\u201d).<\/p>\n

Questioning headlines don\u2019t disprove these fears, but their ubiquity complicates the idea that markets are gripped by blind euphoria. Ritholtz Wealth Management\u2019s Ben Carlson notes only two magnificent seven stocks \u2013 Nvidia<\/a> and Alphabet<\/a> \u2013 actually beat the S&P 500 last year, with Microsoft, Apple, Amazon, Meta and Tesla all lagging. Additionally, valuations for most big tech stocks barely moved. Excluding Tesla, multiples were broadly flat, says Carlson, while price-earnings ratios for Nvidia, Broadcom, Amazon, Oracle and Apple actually fell.<\/p>\n

Similarly, JPMorgan\u2019s Michael Cembalest says in his 2026 outlook that valuations are \u201chigh, but not as high as you might think\u201d. The S&P 500\u2019s forward price-earnings ratio only barely rose in 2025, with almost all the index\u2019s 18 per cent gain attributable to earnings growth. Technology valuations are \u201croughly half the levels seen at the dotcom peak\u201d. They also rest on persistently high profit margins \u2013 and higher profitability is logically linked with higher valuations. Put another way, global tech PEG ratios \u2013 valuations adjusted for expected growth \u2013 are \u201cnot that different\u201d from the overall global equity market. <\/p>\n

That does not mean there are no excesses, or that valuations are cheap. Indeed, Cembalest says it is right to ask what could go wrong, given markets are highly concentrated and at all-time highs.<\/p>\n

However, it does suggest 2025 was not a blow-off year, and that many bubble warnings may be overstating the case.<\/p>\n","protected":false},"excerpt":{"rendered":"This year has begun much as 2025 ended, with a steady drumbeat of warnings about an AI bubble.…\n","protected":false},"author":2,"featured_media":133781,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[220,218,219,61,60,80],"class_list":["post-245530","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-artificial-intelligence","tag-artificialintelligence","tag-ie","tag-ireland","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/245530","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=245530"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/245530\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/133781"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=245530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=245530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=245530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}