"While others see an inflating AI bubble that could burst and lose investors a boatload of money, others see underinvestment in some specific parts of the theme. Undoubtedly, it's hard to know with any degree of certainty where the AI trade goes next, especially as other volatility drivers (think Trump tariffs) are thrown into the mix. Either way, I do think that value investors who insist on modest multiples and discounted long-term growth stories might still be able to score pretty good gains over time,"
"Deutsche Bank said that the "honeymoon is over" for the AI trade. And that could spell trouble for the broader basket of names, including the Mag Seven heroes that have more recently fallen out of favor. In a climate where the bears might be starting to take control, there are still several bullish voices that stand out. Andrew Ng is one of the pundits who believes that there's still opportunity to be had in the AI trade."
Market views on AI diverge between fears of an inflating bubble and concerns about underinvestment in specific areas. The next direction of the AI trade is highly uncertain amid other volatility drivers such as potential tariffs. Value investors who target modest multiples and discounted long-term growth can potentially earn strong gains as broader enthusiasm cools. The Magnificent Seven, including Apple, remain core long-term AI exposures, but significant selling has pushed names like Apple, Microsoft, and Meta about 13%, 17%, and 18% below their highs. Those lagging Mag Seven stocks may represent undervalued bargains. Deutsche Bank warned the AI "honeymoon is over", while Andrew Ng highlights underinvestment in the application layer compared with frontier models, chip makers, and infrastructure.
Read at 24/7 Wall St.
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