Is the AI Bubble About to Pop? Where 4 Experts Are Putting Money
Earlier this week, something remarkable happened on a Ukrainian battlefield.
A wounded soldier was stranded in a minefield as enemy drones circled overhead. Traditional rescue vehicles could not reach him, so Ukrainian forces tried something extraordinary.
They sent in a drone.
A massive six-rotor drone originally designed to drop bombs.
The soldier strapped himself to the aircraft, which lifted him off the battlefield, carried him over dangerous terrain, and lowered him to safety.
The Ukrainian military described the mission as the world’s first aerial drone evacuation of a wounded soldier.
Think about that for a second.
Technology that once existed primarily in science fiction is now saving lives on the battlefield. And that transformation is happening everywhere.
Artificial intelligence is accelerating drug discovery, redesigning computer chips, automating factories, and changing how companies operate.
The technology is real, and so are the investment opportunities.
But just because a technological revolution is real does not mean every stock riding that revolution is a great investment. We learned that lesson during the internet boom of the late 1990s.
The internet changed the world, just as investors expected. But plenty of internet stocks collapsed anyway. And today, with AI stocks commanding enormous valuations, borrowing costs rising, and market leadership narrowing, investors are confronting a familiar question:
Is AI another bubble?
I was asked that question on the new The InvestorPlace podcast and here’s what I said:
“Of course AI is a bubble.”
But the real question could determine whether investors make fortunes or lose them is much more important:
When does the bubble pop?
And in the latest episode of The InvestorPlace, my colleagues Louis Navellier, Eric Fry, and Jonathan Rose tackle that question from three very different perspectives.
Their discussion reveals why this market is becoming increasingly dangerous, and why I believe the AI boom still has room to run. Give it a watch here:
Why I Am Still Bullish on AI Stocks
So, yes, I believe we are in an AI bubble.
I also believe that bubble has not reached its breaking point.
Why? Because the money is still flowing.
Companies are still expanding AI infrastructure. Semiconductor demand remains strong. And the recent pullback in major chip stocks has brought buyers back around important technical support levels.
Louis Navellier pointed to Nvidia Corp. (NVDA) and Micron Technology Inc. (MU) as compelling opportunities during the sell-off. He also highlighted Bloom Energy Corp. (BE) because AI data centers need reliable electricity.
Those are precisely the kinds of businesses benefiting from the infrastructure demands of this revolution.
Still, Eric Fry raised an important counterargument.
Even excellent businesses can become poor investments when expectations grow too high.
That is why he favors finding opportunities beyond the most crowded AI trades, including companies applying AI in pharmaceuticals and medical technology.
It is a perspective worth considering.
The AI Boom Is Entering a New Phase
The late 1990s created enormous wealth before the dot-com bubble burst. I believe the late 2020s could offer investors a similar opportunity. But there’s a catch…
The stocks that made investors rich during the first phase of the AI Revolution may not be the same stocks that lead its next phase.
And that is precisely what my colleague Eric Fry is warning about.
Eric believes two powerful forces are converging on America’s biggest AI companies: increasingly expensive financing and growing political opposition to the massive data centers powering this revolution.
Consider what happens over the next two weeks.
Meta Platforms Inc. (META) just reported earnings last night; Microsoft Corp. (MSFT) follows on Oct. 28, with Alphabet Inc. (GOOGL) and Amazon.com Inc. (AMZN) expected to report around the same time.
Investors will be watching their AI spending plans closely.
Then, on Nov. 3, Americans head to the polls for the midterm elections.
And data centers have become a surprisingly contentious political issue, with politicians from both parties calling for restrictions and demanding that technology companies shoulder more of the costs of their enormous electricity needs.
That creates an interesting possibility.
While the companies building AI infrastructure face higher costs and mounting political pressure, companies applying AI to improve their businesses could emerge as the next market leaders.
Eric calls this potential shift “the Separation.”
And he believes it could begin as soon as Nov. 4.
Now, I remain bullish on the long-term AI Revolution. But Eric makes a compelling case that investors need to start looking beyond the companies that have dominated the trade so far.
In fact, he has identified a group of overlooked AI stocks he believes could benefit as capital rotates away from the market’s biggest names.
He is even revealing his No. 1 AI Applier stock pick for free.
Watch Eric Fry’s special briefing here to discover why he believes the AI boom could split in two after the midterm elections — and which overlooked stock he recommends buying before that happens.
Because the next fortune in AI may just come from the companies putting that revolution to work.
The post Is the AI Bubble About to Pop? Where 4 Experts Are Putting Money appeared first on InvestorPlace.
