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AI Stocks Balloon Even As Earnings Lag, Jefferies Warns
An anonymous reader shares a report: A basket of 27 large-cap AI stocks created by wealth manager and brokerage house Jefferies has surged 127% in value since ChatGPT's launch in late 2022, adding about $10 trillion in market cap. However, 2025 earnings forecasts for these companies have increased o...
An anonymous reader shares a report: A basket of 27 large-cap AI stocks created by wealth manager and brokerage house Jefferies has surged 127% in value since ChatGPT's launch in late 2022, adding about $10 trillion in market cap. This disconnect has pushed the incremental price-to-earnings ratio for AI stocks to 73 times, suggesting investors are pricing in extremely optimistic growth expectations across the sector. Despite signs of overvaluation, Jefferies believes the AI bubble could keep expanding in the near term, citing strong capital expenditure plans through 2025 and ample cash reserves at major cloud providers.
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