Financial Risks

A DayTrading.com report suggests the AI frenzy shows signs of overvaluation, echoing the dot-com era despite AI’s transformative potential and real-world applications. While acknowledging AI as a legitimate boom, the report highlights concerns like inflated stock prices, AI “washing,” and reliance on high-risk financing. Optimistic investor sentiment, coupled with potential inexperience, could also fuel a bubble. However, unlike the dot-com era, AI is delivering productivity gains, though profitability remains limited to a few key players, suggesting long-term investments over immediate returns.