Investor Jeremy Grantham warns AI hype mirrors past tech bubbles

insider.com October 31, 2024, 04:01 PM UTC

Investor Jeremy Grantham warns that the current excitement around artificial intelligence (AI) resembles past tech bubbles, such as the dot-com boom and the railroad expansion of the 1920s. He predicts a significant decline in AI stock values as the bubble grows. Grantham believes that the hype surrounding AI will lead to substantial losses once the bubble bursts, similar to previous tech manias. He notes that while AI has the potential for long-term benefits, the short-term market reaction will likely be negative. Other analysts share concerns about high valuations in the tech sector and the potential for a major market correction. They point to indicators like elevated price-to-earnings ratios and increased household stock ownership as signs of an impending downturn.


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