The AI Fueled Stock Market Surge Will Be as Fleeting as the Dot-com Era, Says Economist David Rosenberg

David Rosenberg, an economist and strategist at Rosenberg Research and analysts at UBS, said the rally in U.S. stocks, fueled by the artificial intelligence (AI) frenzy, will be as fleeting as the dot-com era.

Rosenberg said that the current stock market surge is overdone, and despite the high interest rate environment, tightening credit conditions and ongoing debt ceiling negotiations, US stocks are doing well.

Earlier this month, the S&P 500 hit 4,200 for the first time since August, up 9.6% since the start of the year.

“I think there’s a price bubble in U.S. stocks, if you look atNasdaq 100 index, which actually looks weird and it’s overbought. “

The recent strong rebound in U.S. stocks is partly due to the enthusiasm for investing in artificial intelligence.

The tech-heavy Nasdaq Composite closed 1.7% higher on Thursday, boosted by stunning earnings from chipmaker Nvidia . Shares of Huida soared after it issued an upbeat second-quarter forecast amid strong demand for its AI products. Nvidia mentioned AI up to 43 times in this week’s earnings conference call. The stock price soared 24% on Thursday’s close and continued to rise 2.54% on Friday. The market value is approaching the trillion-dollar club.

“This type of corporate behavior isn’t too different from what happened in the dot-com bubble, where one company after another satisfies investors’ questions about how it plans to incorporate the Internet into its business or simply because they grow,” Rosenberg said. com’s name.”

Rosenberg added: “So, while we believe in the long-term benefits of AI, from an investor’s perspective, the current environment is showing some kind of mania.”

UBS analyst Art Cashin also expressed a similar view. The AI ​​boom in U.S. stocks looks like a microcosm of the dot-com bubble of 2000, according to Cashin.

Wall Street investors are preoccupied with the AI ​​hype, and as companies integrate AI into their product lines, Huida (NVDA-US), Microsoft (MSFT-US) and other tech stocks soared.

“Everything that people hear, will be affected by AI, from new medicines, medicines, to the nature of all types of predictions, and it’s going to be interesting,” Cashin said.