AI Stocks — Bubble? Yes. About to Burst? Not Yet.There is a lot of discussion across the web about a potential bubble in AI-related stocks. While I do agree that we are, indeed, in a bubble, I strongly disagree with the idea that it is about to burst.
To cut through the noise, it’s better to step back from individual names and look at the index, which offers a clearer view of the broader picture.
🔎 The Bigger Technical Picture
As seen on the chart:
- After the early-April drop, triggered by the tariff-related headlines, the index resumed a healthy and well-structured uptrend
- Since that low, price has almost doubled, a clear sign of strong and persistent demand
- The correction that began in early November stopped just above the former resistance and the psychological 3000 level
- From there, price resumed higher and is now testing the previous resistance / ATH zone
This type of behavior — old resistance acting as support, followed by a renewed push higher — is textbook bullish structure, even in an overextended market.
⚖️ Valuation vs. Reality
There is no doubt that:
- Price is very extended
- From a fundamental standpoint, valuations is overpriced
- A lot of “phenomenal” future expectations from the AI sector are already priced in
That said, markets do not top simply because something is expensive.
📌 Conclusion
In my view, this is not yet the moment for the bubble to burst.
As long as price structure remains intact, there may still be room to the upside, potentially toward:
➡️ 4500, if not even higher
Timing a top in a momentum-driven market is one of the hardest things to do — and often the most expensive.
As John Maynard Keynes, the father of modern macroeconomics, famously said:
“The market can stay irrational longer than you can stay solvent.”
A reminder worth keeping in mind — especially in environments like this. 🚀
