AI stocks in bubble trouble - are Nvidia, Microsoft in danger? Economist says it's worse than the Dot-Com crash of 1999
Sløk wrote in his research note that, 'The difference between the IT bubble in the 1990s and the AI bubble today is that the top 10 companies in the S&P 500 today are more overvalued than they were in the 1990s,' as quoted by Fortune in its report.According to the report, currently investors are betting so heavily on AI that the stock price of companies like Nvidia, Microsoft, Apple and others have become detached from their earnings.
ALSO READ: Why can't this Wells Fargo banker leave China? The Chenyue Mao case everyone's talking about
Sløk even included a chart to explain his analysis, as per Fortune. In the chart, he compared the 12-month forward price-to-earnings (P/E) ratios of the S&P's top 10 companies to the rest of the index and the S&P 500 as a whole, which shows that today's bubble is even bigger than the one that marked the end of the dot-com era, as reported by Fortune.According to the Fortune report, although most of those top companies are profitable, compared to the losses of many dot-com darlings before the market crash at that time, the fundamentals do not justify the multiples.ALSO READ: OpenAI unveils ChatGPT Agent: Too tired to plan your date, shop online, or create a slide deck? This new AI tool has you covered
Even though the S&P has hit new records recently and is currently close to an all-time high, Sløk pointed out that the performance boost is mainly because of the rise of the Top 10 stocks, according to the Fortune report.He is concerned that investors are buying the hype and paying prices as if the promises and boasts of these firms, like claims of trillion-dollar savings and world-changing breakthroughs, are already a certainty, as per the report. The Fortune report highlighted that the 1990s were a lesson that not every promise would or could actually become a reality.
Sløk's not the only warning sounding the alarm, even Alibaba Group Chair Joe Tsai has warned that US AI stocks are in a bubble, as has long-time tech exec Tom Siebel, as reported by Fortune.
ALSO READ: Biggest piece of Mars on Earth sells for $5.3 million — meet the meteorite that shocked Sotheby's Why are people investing so heavily in AI?Because AI is seen as the next big revolution, capable of saving companies money, transforming industries, and driving future growth, as per the Fortune report.
Are companies like Nvidia and Microsoft really in danger? They're strong businesses, but if their stock prices are built on unrealistic expectations, any disappointment could cause a sharp drop, as per Torsten Sløk's analysis.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Mint
16 minutes ago
- Mint
5 Windows settings I tweak on every new laptop to get more done faster
As someone who reviews multiple laptops, setting up a fresh machine each time gets a little repetitive. But over time, I have built a routine during setup that helps me get started faster. It also makes the device more efficient right from the start. Today, I am sharing these tricks with you so you can also make your Windows laptop experience much better. Setting up a new Windows laptop feels great, but not when you have to do it every few weeks. I discovered a simple trick to bypass the Microsoft account login screen. On the setup screen, press Shift + F10 to open Command Prompt. Then type oobe\bypassnro and press Enter. The laptop will reboot and return to the setup screen. When you reach the network setup stage this time, click 'I don't have internet' to create a local account. This saves time and avoids automatic sign-ins to all Microsoft apps. Trackpad gestures significantly boost productivity, especially when working with many browser tabs. I set the three-finger tap to act as the middle mouse button, which is ideal for opening links in new tabs and quickly closing them. I also customise the four-finger swipe up/down gestures to control volume. To do this, go to Settings > Bluetooth & devices > Touchpad > Advanced gestures. There, you can modify the three-finger and four-finger gestures to suit your workflow. You can also assign a four-finger tap to play/pause music and use four-finger left/right swipes to skip tracks. Most laptops come preloaded with bloatware that consumes storage and system resources, eventually slowing performance. You can uninstall these apps using a powerful uninstall tool called Revo Uninstaller. I recommend using this tool very carefully, as it can also uninstall system apps that may be important for Windows to function properly. Many laptops I review feature QHD+ or 4K resolutions, and default scaling often wastes valuable screen space. Adjusting the scaling greatly improves productivity by allowing more content to fit in apps and enhancing split-screen efficiency. To adjust, right-click on the desktop and select Display settings. Scroll down to Scale and layout, then adjust the scaling percentage. I typically reduce it to 125% or even 100%, depending on the display size and resolution. Most people don't realise this, but Delivery Optimisation quietly runs in the background and can slow things down. It's supposed to speed up updates by sharing them with other PCs over the internet, but in reality, it ends up using bandwidth and system resources. I always disable it right after setup. To do this, go to Settings > Windows Update > Advanced options > Delivery Optimisation, and turn it off.
Time of India
28 minutes ago
- Time of India
Nvidia places huge order of its most powerful AI chip in China but why it may not meet demands
Nvidia has reportedly placed a significant order for H20 chipsets with contract manufacturer Taiwan Semiconductor Manufacturing Company (TSMC) last week. News agency Reuters report that this move signals a change in strategy, citing sources as saying that strong Chinese demand has prompted Nvidia to increase production rather than solely rely on its existing stockpile. The report said that Nvidia has ordered TSMC to manufacture 300,000 H20 chips that will add to the US chipmaker's current inventory of 600,000 to 700,000 H20 chips. For context, US research firm SemiAnalysis estimates Nvidia sold approximately 1 million H20 chips in 2024. Nvidia has also reportedly requested that Chinese companies interested in purchasing the H20 chips submit new documentation, including client order volume forecasts. Why Nvidia's latest H20 AI chip order for China is important Firstly, this order comes after the Trump administration reversed an effective April ban earlier this month, allowing Nvidia to resume sales of its H20 graphics processing units (GPUs) to China. The initial ban was implemented to restrict advanced AI chip access to Chinese entities, citing national security concerns. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Pierce Brosnan's Wife Lost 120 Pounds - This Is Her Now Undo Crucially, Nvidia requires export licenses from the US government to ship these H20 chips. While the company stated in mid-July it had received assurances from authorities regarding expedited approvals, the US Commerce Department has yet to officially approve these licenses, according to multiple sources cited by Reuters. Nvidia specifically developed the H20 for the Chinese market following broader US export restrictions imposed on its more powerful AI chipsets like the H100 and the new Blackwell series, which are sold in other global markets. Nvidia CEO Jensen Huang had previously stated this month during a visit to Beijing that the decision to restart H20 production would hinge on order volumes, noting that reactivating the supply chain would take about nine months. Prior to the April ban, major Chinese tech firms including Tencent, ByteDance, and Alibaba significantly increased their H20 orders, deploying them for cost-effective AI models like DeepSeek's, as well as their own. AI Masterclass for Students. Upskill Young Ones Today!– Join Now
Time of India
39 minutes ago
- Time of India
Will AI make learning more personalised or passive for students? Jensen Huang and Ramine Tinati offer opposing views
As artificial intelligence continues to redefine how work and knowledge are distributed, education stands at a pivotal crossroad. Will AI help students learn in a more customised, efficient manner, or will it encourage disengagement by doing too much of the intellectual heavy lifting? The answer, according to two of today's tech voices, depends on how we design learning systems and how we rethink the purpose of education itself. During the Fortune Brainstorm AI conference in Singapore, where Ramine Tinati, lead at Accenture's APAC Center for Advanced AI, expressed caution about AI's impact on productivity and learning. Earlier this year, Nvidia CEO Jensen Huang offered a contrasting take on the relationship between AI and cognitive growth during his appearance on CNN's Fareed Zakaria GPS . Together, their perspectives highlight a growing divide in how experts view AI's role in student learning: as either an enabler of deeper thinking or a tool that risks fostering passivity. Personalised tools or automated shortcuts? Speaking in Singapore, Tinati questioned the assumption that faster task completion equals improved productivity or learning. 'If you give employees a tool to do things faster, they do it faster. But are they more productive? Probably not, because they do it faster and then go for coffee breaks,' he said, referring to the corporate world. The parallel in education is clear: AI tools may help students complete assignments quickly, but does that equate to deeper understanding? Tinati warned that meaningful progress requires more than bolting AI onto existing structures. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Sintering Furnace Across International Get Quote Undo For schools and universities, this raises critical questions about whether classroom workflows, assessment methods, and pedagogy are being redesigned to take full advantage of AI or if technology is merely being layered on top of outdated systems. His comments suggest that without a holistic reinvention of how education is delivered, students may become increasingly passive learners, reliant on AI-generated summaries, solutions, and answers instead of developing analytical and creative skills. Intelligence amplifier or crutch? Jensen Huang, on the other hand, sees AI not as a shortcut but as an amplifier. Rejecting concerns raised by a Massachusetts Institute of Technology (MIT) study that suggested frequent AI use may impair cognitive function, the Nvidia CEO offered a personal counterpoint. Huang said he uses AI 'literally every single day,' on Fareed Zakaria GPS in July 2025 and says his 'cognitive skills are actually advancing.' His stance reflects the idea that AI, when used intentionally, can deepen intellectual engagement by freeing up mental bandwidth. Instead of spending time on rote memorisation or repetitive tasks, students could spend more time asking deeper questions, synthesising ideas, or applying knowledge in creative contexts. A shift in educational philosophy As schools and universities integrate generative AI tools into classrooms, the tension between automation and agency becomes more urgent. Adaptive learning platforms, AI tutoring bots, and automated grading systems offer the promise of scale and personalisation, but they also risk removing the friction that is often essential to deep learning. Educators remain divided. Some see AI as a valuable co-pilot, helping differentiate instruction and offer real-time feedback. Others worry that over-reliance on AI will erode students' critical thinking and reduce opportunities for productive struggle, an essential part of learning. What both camps agree on, however, is that AI's impact on education will be shaped less by the technology itself and more by the values, structures, and pedagogy surrounding its use. Tinati's call to 'reinvent the work' resonates with education leaders who argue that merely digitising textbooks or automating homework checks is not enough. True transformation requires rethinking how knowledge is acquired, applied, and assessed. For some, this means designing learning environments where AI acts as a guide, not a substitute. For others, it means slowing down the rush to automate in favour of deeper dialogue around learning outcomes. What's ahead As AI becomes more embedded in classrooms and curricula, its effects will likely remain contested. The divide between those who view it as a tool for liberation and those who see it as a threat to student autonomy reflects a broader uncertainty about the future of learning. For now, the debate between voices like Jensen Huang and Ramine Tinati underscores a vital question for educators and policymakers alike: Are we shaping AI to serve the goals of education or allowing it to reshape education without reflection? TOI Education is on WhatsApp now. Follow us here . Ready to navigate global policies? Secure your overseas future. Get expert guidance now!
