Are We In An AI Bubble?! – 10/08/26

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.