Investors are facing meaningful risk as funding for artificial intelligence ventures has surged, with observers describing a price bubble forming in the market. CNBC reported this perspective, citing economist and analytics chief David Rosenberg of Rosenberg Research, who argues that the market’s exuberance deserves closer scrutiny.
There is no doubt in Rosenberg’s view that a price bubble is visible. He pointed to the unusual and extended ascent of the Nasdaq 100, a tech-heavy index, noting it has climbed roughly 18.6% over the past half year. This kind of momentum, he suggests, rarely aligns with fundamentals that justify such rapid gains across a broad swath of technology equities.
Rosenberg warns that the recent surge in AI investment dynamics may not translate into durable gains. He draws a parallel to the late 1990s dot-com era, when rapid speculation outpaced real earnings and sustainable business models, leading to a sharp reset. The current AI craze, in his assessment, risks repeating that pattern if investor attention remains fixated on hype rather than earnings potential and risk management.
According to the economist, the popularity of artificial intelligence has shifted some investor focus away from broader macro risks, including the threat of a recession. Yet, despite this tilt, the price action in financials tied to banks, consumer goods manufacturers, and transport sectors continues to reflect ongoing concerns about macro stability and potential downturns ahead. The divergence between AI optimism and traditional value signals raises questions about how long market drivers can stay in sync without sooner or later re-evaluating fundamentals.
The discussion underscores the different pressures at play for investors in North America. As capital flows into AI-centric firms, there is a tension between the desire for exposure to transformative technology and the need to build resilience against a potential macro shock. In this environment, careful risk assessment becomes essential, with attention to balance sheets, cash flow quality, and attainable milestones that can translate into tangible, repeatable earnings rather than fantasy growth stories. This is a moment where prudent diversification and disciplined valuation practices could matter as much as innovation itself. [citation: CNBC, referencing Rosenberg’s analysis]