Recently, artificial intelligence (AI) has been hotly debated in the market, which has also promoted the increase of stocks of related concepts, which in turn has triggered a bubble formation debate. However, Jeremy Siegel, a long-term bull in US stocks and professor of finance at the Wharton Business School, believes that the AI boom is not a bubble, and the rise of related concepts is mainly driven by the twin factors of market sentiment data and actual revenue.
Siegel pointed out that the current AI boom is not a bubble as some market participants said. People are excited about AI. At the same time, the excellent revenue performance of Huida (NVDA-US) also proves the optimism of the market, thus forming a double factor to promote a position.
“In the long term, Huida’s stock price may indeed be slightly overvalued, but in the short term, market momentum and investor sentiment may indeed cause the stock price to outperform itself, and nobody can even guess how high it will rise,” Siegel said..
He contrasts the current AI boom with the dot-com bubble era of the 1990s. During the dot-com bubble, he noted, “companies that were not profitable were highly valued.” In contrast, Huida is a “very high quality company”.
Siegel also said that the surge in AI concept stocks boosted the S & P 500 index, which could become “a winner in the banking crisis.” He also said that there is no need to worry about the credit conditions of large cap stocks, because credit conditions tend to affect small and medium enterprises.
The S&P 500 is up nearly 10% so far this year, led by strong gains in companies like Meta (META-US) and Fidelity, both of which are up more than 115%. Elsewhere, Microsoft, Apple, Amazon and Alphabet gained more than 39%.
Recently, many people on Wall Street are predicting that US stocks will continue to face selling pressure in the first half of 2023, and eventually bottom out as the overall economy goes into recession.
Still, Siegel believes the stock market should have a very good year, with the S&P 500 up 15% in the first half because the market is forward thinking and reflective of the future.
