Why betting on the AI bubble bursting could be a costly mistake

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Many investors fear an AI bubble, but waiting for it to burst could mean missing major gains.

In this episode of Stocks in Translation, Hennion & Walsh Chief Investment Officer Kevin Mahn joins host Allie Canal and Senior Reporter Brooke DiPalma to discuss whether or not the market is running off an AI bubble as companies like Nvidia and others continue to pour billions into the technology’s foundation. Mahn argues the real risk is not in overspending, it’s sitting out of the race entirely. He offers his insights as to why it’s important to get into the game before it’s too late.

Check out the full episode here.

Twice a week, Stocks In Translation cuts through the market mayhem, noisy numbers and hyperbole to give you the information you need to make the right trade for your portfolio. You can find more episodes here, or watch on your favorite streaming service.

This post was written by Lauren Pokedoff

Video Transcript

00:00 Allie

When you look at the the bubble question, Yes. How do you frame that to to clients and what are your overall thoughts there?

00:05 Speaker B

Yeah. I I would suggest to to clients or anyone who asked me this questions, including you right now, Ally. If you're waiting for the AI bubble to burst, I think you're going to spend a long time waiting and likely miss out on some significant returns while you're waiting. Now, that doesn't mean that there aren't some lofty valuations within certain companies within the overall AI ecosystem. But I still contend, if I could use a baseball analogy on the show right now,

00:40 Allie

Yeah, of course.

00:41 Speaker B

right? I contend that we're

00:45 Allie

I was totally ready for it and then I lost. Dodgers won.

00:47 Speaker B

Go Yankees. Um, that we're only in batting practice and this is a double header. Batting practice involves all the AI infrastructure buildouts. In fact, Jensen Juan has suggested by the end of this decade, there could be the three to four trillion dollar in AI infrastructure investment. We're not even at a billion right now by the end of this decade. Wow. And we haven't even moved into the games right now. So, if you think about the company spending tremendous amount of capX dollars on AI infrastructure right now, their RRI may not come for years to come, right? But the bigger risk to me is not those companies who overspend, it's those companies who are underspending or not spending at all, because it's going to be very hard to play catchup with all these strategic alliances are now taking place. It seems like, you know, the show Survivor. Everyone's trying to form strategic partnerships to make sure they don't get voted off the AI island. And that's what we're seeing take place.

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