OpenAI CEO Sam Altman has raised eyebrows with his blunt take on the AI boom. Speaking at a dinner with reporters in San Francisco, he admitted that AI is a major milestone but warned that investor enthusiasm may be inflating an AI bubble. His concern is not about the power of AI itself, but about stock prices climbing faster than company earnings can support.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
His comments quickly sparked debate on Wall Street, where analysts remain divided over whether today’s AI surge is the start of a bubble or still has plenty of room to run.
Wall Street Split on AI Valuations
Analysts on Wall Street remain divided over whether the AI boom is an early bubble or a lasting driver of growth.
Analysts like Steve Sosnick of Interactive Brokers (IBKR), warned that too much investor money has crowded into a few big names such as Nvidia (NVDA) and Microsoft (MSFT). He compared it to an overcrowded building, saying that if everyone tries to exit at once, the rush could turn chaotic. Sosnick stressed that if investor sentiment changes suddenly, it could trigger a sharp sell-off in these stocks.
Also, University of Michigan professor Erik Gordon took the warning further, saying the financial damage from an AI bubble could be worse than the dot-com crash. He pointed to CoreWeave (CRWV), an Nvidia-backed AI-powered cloud computing company that recently lost 33% of its value in just two days, erasing about $24 billion in market worth. Gordon warned that if AI valuations collapse, everyday investors could be hit hard.
Meanwhile, other analysts remain optimistic about the AI momentum. Jeff Buchbinder of LPL Financial argued that the surge in AI spending is not just hype but could help raise productivity across the wider economy. He noted that this wave of investment has the potential to deliver benefits well beyond the technology sector.
Ray Wang, research director at Futurum Group, also remains upbeat on AI. He sees strong fundamentals in both the AI and semiconductor sectors, saying, “I don’t see it as a bubble.” Instead, he views the current rally as a sign that the market is maturing.
Which Is the Best AI Stock to Buy?
For investors interested in investing in the artificial intelligence sector, we have rounded up the best stocks to buy in this sector, using the TipRanks Stocks Comparison tool.
