But some big companies also got way overpriced back then, which is the focus of this analyst. For example Microsoft was at $62 in December 1999. After the bubble popped it didn't get back to that until April 2017. It's around $511 today, which works out to an annual return of around 8.5% if you bought it at the bubble peak.
It may be a good idea to take some profits on any AI related stocks.
Theoretically, AI is the wisdom of crowds.
In practice, it is GIGO.
The slopes of the NVDA and PLTR charts are reminiscent of late 1999.
Is there a market bubble in AI company valuations?
Yup.
I’m using it in my CPA practice recently and I find it extremely helpful tool and its uses going to help me increase my fees and decrease my time a win-win
Sell Microsoft?
Limited, narrowly-focused applications, such as automated navigation, either in the air or on the ground, can work well because those are primarily mechanistic tasks. But computers are not good at those tasks because they’ve somehow obtained the ability to think. They’re good at them, even better than humans at times, because they can use a multitude of sensors to give them better situational awareness, and they can calculate at extremely high speeds. These are tasks that are perfectly suited for what is just a very advanced calculator.
But the pipe dream of “general AI” will never work, for among many reasons the fact that these software algorithms make constant errors (because they can’t actually think!), and that the larger they grow the more errors they make and the more difficult (and eventually impossible) it becomes for humans to detect errors and correct them. A sufficiently comprehensive “AI” would be impossible to quality check, because no human or even team of humans would be able to know how and why it made every one of its trillions of decisions per second.
Unless we’re just going to create an idiocracy that unquestioningly trusts anything some “AI” algorithm spits out (a very real risk given the current foolish feeding frenzy), I see no long-term place for “general AI.” The very concept is fatally flawed, no matter how advanced the calculation engines that it runs on become.
You mean NVIDIA at 55 and TESLA at a PE of 177 might be a little over priced? Tell me it isn’t so. /s
These are so overvalued and stay that way because they are held by so many who would now rather not but are in too deep.
Ferrari has a PE of about 51 and is more profitable than Tesla.
Tesla is simply a car maker and ranks globally in the bottom of the pack by number of units but second to Ferrari in profitability per unit. Watch what happens there without the subsidy.
If I did not already own S&P 500 ETF I would opt for the S&P 493.
Yeah, and when you sell it continues to go up! It's all a gamble, either way. We own some AI related stocks. One that my wife bought for $10 went up 2500 percent (she bought a lot of shares). If she had taken any profits earlier she would have kicked herself. We're sitting on most unless there is a substantial reversal.
Remember, AI is nothing more than what some programmer designed it to be, including that programmer’s ignorance, biases, depth or lack of knowledge, experiences, and data sources.
Ask it a question like “who is the best presidential candidate” and see what happens.
So, AI stock is good for laundering money.
One more thing, restoring and recommissioning old nuclear plants to feed the server or data farms? No risk in that is there?
Anything is possible if you can get your hands on enough of OPM. It becomes all about he multiples and keeping the show attractive.
On the other side of the equation though, I asked google what dividend stocks to invest in for long term income. Three out of the four named are the same ones I spent days doing research and screening to find and ultimately bought. The citations given were complete, current and mostly well reasoned. Same goes for medical diagnosis. Not a complete answer but a decent pointer followed by confirmation.
We have been here before at least once in my lifetime. I bought Broadcom waaaaay back but I also bought a few others in that day that have since vanished. I also bought 20% zero coupon bonds back then with the longest maturities I could possibly get. Just wish I had bought more of them. However, like one of my landmen said, “25% of a good deal is probably enough.” He made Billy Bob look like the yokel that he really is.
AI is the latest fad. Unfortunately, it isn’t going away. It will be used for many things where it isn’t really suitable. And it won’t be used to give us more freedom. Instead it will help the fascists take away more of our freedoms.
BUY BEAR STEARNS!!!
BUY PETS DOT COM!!!
As an aside. I have been having a great time using AI. I can’t tell you how much time it saves making code for my little machine controls. I get on Grock and type in “I need a PLC ladder program that controls.....this and that...” and in a minute I have workable ladder programs, python, or C++ with HMI graphics all ready to go. Hours and hours of manual programming done way better and cleaner than I could have done it. Autodesk has released their “generative AI” based design capabilities that produces some really great designs. It’s not “smart” enough to realize what it designs can not be produced easily just yet but it’s getting better.
I can’t wait until AI does my taxes and book keeping.
Microsoft’s PE ratio looks to be in the upper 30s, which is too high for me to be interested in buying, but at least it does have earnings. Nividia is in the mid 50s which is grab a parachute and bail territory, although it has been much worse in some recent years. On the other hand Intel has a PE of zero, because they are in a hole and digging.
Looking at defense stocks these days.
these morons love to talk about the tech bubble, but the fact of the matter is, even if you went all in the day before that bubble popped, and had simply held until now you would have made 6 times your money now by simply investing in a Nasdaq ETF.
Nvidia and 2 Other Chip Stocks to Play AI Into Earnings, Says J.P. Morgan