The debate over whether artificial intelligence is in a bubble misses the point, argues strategist Dhaval Joshi, who says markets are working through a rolling sequence of mini-bubbles rather than one grand mania. In recent months, investors have bid up and then punished different AI “beneficiaries” in turn: software names rallied on hopes for productivity gains before sliding as AI agents threatened subscription models; silver spiked on data‑center demand assumptions and later retreated; and chipmakers soared on extraordinary pricing power that Joshi contends will fade as supply catches up. The dynamic, he says, reflects narrative contagion more than sober price discovery.
Joshi characterizes today’s setup as a profit‑margin bubble, not an earnings or valuation one, with markets belatedly questioning how long “stratospheric” margins can hold. He sees AI‑driven capex by Big Tech squeezing free cash flow, with a potential spending peak in late 2026 or early 2027. The sequence could unravel if real rates climb sharply, capex unwinds quickly, or a non‑mild recession hits. While crypto has been a bystander so far, he sees room for future AI‑crypto crosscurrents. Until then, he says, investors face a series of “playable segments” as capital races from one putative moat to the next.
Strategist: Don’t expect a single AI bubble—expect a chain of fast‑inflating, fast‑popping mini-bubbles
- Trending
- Comments
- Latest
