The surge in AI-linked stocks has reignited debate over whether the sector’s boom is evolving into a bubble, as Nvidia’s market value hit a record on policy tailwinds and robust earnings while more speculative names post eye-watering multiples. Goldman Sachs argues profits largely justify gains, but froth is surfacing: Palantir’s valuation has soared to levels reminiscent of the late 1990s, and Figma’s blockbuster debut signals a reopening IPO window that could draw marquee AI startups to market. Policy appears supportive, with tariff exemptions for U.S.-made chips, a federal “AI Action Plan,” and an anticipated Fed rate cut that could buoy risk assets. Yet today’s landscape differs from the dot-com era, with Big Tech’s scale and moats potentially concentrating AI’s spoils. A Cisco-era cautionary tale looms over Nvidia’s ascent, underscoring Benjamin Graham’s reminder that the market votes in the short run but weighs cash flows over time.
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