Wharton University professor and noted economist Jeremy Siegel is bullish on the Big Tech boom fueled by artificial intelligence, despite bubble concerns.
The AI chip craze, driven by demand for AI-powered chatbots and the high-performance graphics processing units used to train such chatbots on supercomputers, has led investors to invest in certain stocks. are flooding in, with some raising concerns about a bubble.
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“It’s not a bubble yet.” Siegel, Russell E. Palmer, a finance professor at the Wharton School of the University of Pennsylvania, said on CNBC’s “Street Signs Asia” Monday. He said he’s been asked if this could lead to a return to the dot-com bubble of the late 1990s.
Economist David Rosenberg, known for his contrarian views, said: Predicted that the current AI boom could collapse like dotcom stocks did in the late 1990s. The dotcom bubble burst when capital dried up after the massive adoption of the Internet and the proliferation of available venture capital into Internet-based companies, especially start-ups with no track record of success.
“First, there is excitement about AI, and NVIDIA has confirmed that excitement with explosive revenue, which is a double push,” Siegel said.
shares of Nvidia It climbed 24% on Thursday. Company reports better-than-expected results the top and bottom lines of the most recent quarter, It hit an all-time high on the back of exploding demand for Nvidia chips used for AI. The rise has pushed the chipmaker’s market capitalization to nearly $1 trillion.
Nvidia CEO Jensen Huang said on an earnings call that “demand is skyrocketing” for the company’s data center products. Nvidia shares are up 166% year-to-date.
”[In the] I would say that in the long run [Nvidia shares] It was probably slightly overrated. But in the short term, we know the momentum could drive the stock well above its underlying value, and no one can predict how far the stock will go,” Siegel said.
Sunday, Nvidia Announcement of a new class of high-capacity AI supercomputers It was created to enable the development of huge next-generation models for generative AI language applications. Powered by the Nvidia GH200 Grace Hopper Superchip, the supercomputer is expected to offer nearly 500 times more memory than his predecessor, the Nvidia DGX A100, which was introduced in 2020.
“Generative AI, large language models, and recommender systems are the digital engines of the modern economy,” Huang said in a press release. “The DGX GH200 AI supercomputer integrates Nvidia’s cutting-edge accelerated computing and networking technologies to expand the frontiers of AI.”
Wharton’s Siegel said AI stocks are contributing to the economic boom. S&P500 He said the company could be a “winner from the banking crisis.”
“As we all know, the gains in the S&P 500 Index are all dominated by the top 8-9 companies. The remaining 490 companies are flat or down this year. Yep. [the] The Nasdaq was oversold in 2022, and it certainly bounced back, but I think AI has pushed the big tech stocks even further,” Siegel said.
“Keep in mind that large-cap stocks of any kind, tech stocks or not, don’t need to worry about credit conditions. Yes, they certainly should worry about interest rates. will affect the ‘and medium size [companies]said Siegel.
“The S&P could actually be the winner from the banking crisis.”
