"Among the major changes that 24/7 host Doug McIntyre has noticed since the AI boom is that companies like Meta, Microsoft, Amazon, and Oracle no longer trade based on the fundamentals of their traditional businesses but instead on their performance in artificial intelligence. He explains that, in the past, investors evaluated these companies by their core divisions - such as Amazon's e-commerce and cloud services or Meta's user engagement and ad revenue - but now AI success dictates their market value."
"Doug points out that this AI dependency is risky because if AI stumbles, all major tech stocks could fall simultaneously. Previously, individual companies were affected by performance in their specific sectors, but now they rise and fall together based on AI sentiment. Jackson compares this moment to the dot-com boom of the late 1990s, where enthusiasm for a single technological trend drove valuations beyond reason. He warns that while AI has real applications and efficiencies, especially in replacing menial tasks,"
Major technology firms such as Meta, Microsoft, Amazon, and Oracle increasingly trade based on perceived AI performance rather than core business fundamentals. Investors formerly evaluated these companies by distinct divisions like e-commerce, cloud services, user engagement, and advertising revenue. The release of ChatGPT nearly three years ago sparked a rally that tied many tech valuations to AI exposure, driving large gains for firms pivoting to AI infrastructure. That correlation raises systemic risk because setbacks in AI sentiment could move major tech stocks together. Observers compare the current enthusiasm to the late 1990s dot-com boom and warn of a potential future reckoning despite real AI efficiencies in menial tasks.
Read at 24/7 Wall St.
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