Investors’ excitement for the AI boom increasingly comes with a caveat: the risk to their portfolios—and the global economy—if the bet doesn’t pay off. Questions of an AI bubble were somewhat inevitable (just look to the dotcom era) but have ramped up in recent months as new data captures the eye-watering capital expenditure in the sector.
Valuations are being pulled into the limelight as a result (the S&P 500 currently sits at a P/E ratio of 31.50) with bearish analysts worried share prices have spiraled beyond their true potential.
