Is the AI Boom a Bubble? Here’s the Stock I’d Buy Either Way.
Although AI bulls may not want to hear this, an AI bubble is a valid concern. The stock indexes are near record highs, and the CAPE ratio, otherwise known as the Shiller P/E ratio, is at 41, a level that it had only reached during the dot-com bubble.
Nonetheless, such metrics do not imply that all AI-oriented tech stocks are overvalued, and exiting the sector entirely may ultimately not serve investors well. The history of the dot-com bust suggests holding many of the industry’s top stocks led to massive gains once internet stocks recovered.
Such a precedent could make the case for buying and holding Google’s parent company, Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). Here’s why.
Source: www.fool.com — article syndicated from the publisher’s feed; all rights remain with the original publisher.