Are We In An AI Bubble?! – 10/08/26
Shownotes
Artificial intelligence is changing the world. But does that mean AI stocks are worth any price?
A viewer recently sent me a great question: Are we in an AI bubble, and how does today's market compare to the dot-com bubble of 2000?
It's a question worth asking, especially with billions of dollars pouring into AI infrastructure, data centers, semiconductors and the companies promising to revolutionize everything from healthcare to financial markets.
On today's TraderMerlin, we're going to put the hype aside, dig into the numbers and try to answer this question as objectively as possible.
Because here's something investors learned the hard way during the dot-com era:
You can be absolutely right about a technology changing the world—and still lose a fortune investing in it.
The internet did change everything. Amazon, Google and countless other companies transformed the global economy. But that didn't stop the Nasdaq from collapsing nearly 78% between its 2000 peak and 2002 bottom.
So could AI be following a similar path?
There are certainly similarities. Investor enthusiasm is enormous, valuations are elevated in parts of the market, capital spending is exploding, and companies are racing to attach artificial intelligence to their business models.
But there are also some important differences.
Unlike many dot-com companies that had little revenue and no profits, today's AI leaders include some of the most profitable businesses in history. Nvidia, Microsoft, Alphabet, Amazon and Meta are generating substantial cash flow and investing heavily in infrastructure they believe will drive future growth.
But strong companies can still become overpriced stocks.
And that's where our analysis begins.
We'll break down:
- The Dot-Com Bubble – What actually caused the spectacular rise and collapse of technology stocks between 1995 and 2002?
- AI vs. the Internet – How similar are these two technological revolutions?
- Stock Valuations – Are today's AI companies trading at multiples that make economic sense?
- Revenue & Earnings – How much of the AI growth story is supported by actual financial results?
- Nvidia & the Semiconductor Boom – Is demand sustainable, or are investors extrapolating extraordinary growth too far into the future?
- The AI Spending Race – Microsoft, Amazon, Alphabet and Meta are spending enormous sums on data centers and computing power. Will the returns justify the investment?
- Circular Financing – Are investments, partnerships and infrastructure commitments creating an artificial sense of demand?
- Market Concentration – What happens when a handful of AI-related companies account for so much of the major indexes?
- Interest Rates – Why higher Treasury yields could become a problem for expensive growth stocks
- Technical Warning Signs – What price action, market breadth and momentum can tell us before a major trend changes
- Trading Opportunities – How can investors participate in AI's growth without ignoring valuation and risk?
And here's the distinction I really want to explore:
Is artificial intelligence a bubble—or are investors simply paying bubble prices for a genuinely revolutionary technology?
Those are two very different things.
The internet wasn't a fad. But the prices investors paid for many internet stocks in 1999 and 2000 were completely disconnected from economic reality.
Could the same thing be happening with AI?
Or are today's earnings, cash flows and real-world applications enough to justify the enthusiasm?
We're going to compare the data, challenge some popular assumptions and examine both the bullish and bearish arguments.
No cheerleading. No doom-and-gloom predictions.
Just an objective look at the numbers, the history and the risks.
Listen now:👉 Are We In An AI Bubble?!
Because recognizing a revolutionary technology is one thing.
Knowing what it's worth is something else entirely.
Hit Like, Subscribe, and tell me in the comments:
Do you think AI stocks are in a bubble—or are we still in the early stages of the biggest technological transformation of our lifetime?
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