Investors piled back into AI-related stocks despite fears a boom may be morphing into a bubble.
Major tech companies, including Broadcom, Microsoft, and Nvidia, saw their shares close higher on Monday, while Japanese firm SoftBank sold its stake in Nvidia for a huge profit in order to fund additional AI investments.
The mammoth investments tied to driving AI development have sparked fears of an overextension: Goldman Sachs economists argued in a weekend report that “although valuations are high, we are not yet clearly in bubble territory,” but bonds issued by the hyperscalers that are making the biggest bets on AI infrastructure have underperformed their peers, the Financial Times reported.