"Artificial Intelligence Rally: Is It Really on the Rise, or Is It a Bubble?"

Critical Warnings in Artificial Intelligence Investments

Investors on Wall Street have begun to believe that artificial intelligence investments are at risk of overheating. The sharp increase in AI-related stocks and corporate spending raises the possibility that this growth could create a bubble. JPMorgan CEO Jamie Dimon emphasized the need for a cautious approach to maintain high asset prices. "When asset prices are high, there’s more room for a decline. Although consumers are still spending, there is tension in valuations and borrowing costs," he said.

Limits of Investor Enthusiasm

Dimon’s warnings are reinforced by data showing that investor enthusiasm is at excessive levels. The latest Global Fund Manager Survey published by Bank of America drew attention to the AI bubble being seen as the biggest global tail risk. The survey revealed that the cash levels of approximately 200 fund managers have dropped to 3.8%, nearing the 'sell' threshold of 3.7%.

Critical Deals and Bubble Risks

Market analysts indicate that the rise in AI investments by major tech companies carries bubble risk. Google announced it would start building a $15 billion data center in India, while Walmart stated it would develop AI-powered retail tools with OpenAI. However, some analysts argue that the momentum behind these investments is based on solid foundations supported by safe infrastructure.

Source of Market Optimism

DataTrek Co-Founder Nicholas Colas expressed that investor confidence is excessively high. Major tech companies expect double-digit revenue and profit growth by 2026. This indicates an expectation greater than the growth in the S&P 500 Index. However, it remains uncertain whether companies will meet their upper and lower target ranges.