“`html
Artificial intelligence (AI) is projected to contribute $15.7 trillion to the global economy by 2030, according to PwC. The adoptions of AI technologies, enabling systems to make autonomous decisions, are driving significant market interest. For instance, AI stocks like Nvidia and Broadcom have surged 1,140% and 583%, respectively, since the beginning of 2023, fueled by demand for their advanced graphics processing units (GPUs).
However, experts warn of historical tendencies for technological bubbles, with predictions that the AI sector could experience a similar downturn by 2026. Currently, Nvidia has surpassed a price-to-sales (P/S) ratio of 30, which has historically signaled unsustainable valuations, reminiscent of the dot-com bubble in the early 2000s.
Moreover, competitive pressures may further complicate Nvidia’s market dominance, as clients develop their own AI solutions. This could reduce the demand for Nvidia’s GPUs, which currently command high prices due to scarcity.
“`
