Goldman Sachs has steadfastly defended its position that there is no artificial intelligence (AI) bubble, despite analysts’ ongoing concerns about the sharp rise in interest in the AI industry and the ensuing rise in tech equities. Instead of the anticipated bubble, the financial behemoth thinks we are in the midst of an AI revolution.
Some have compared the current rise in AI share prices to the dot-com bubble of the late 1990s; however, Goldman Sachs has vehemently refuted this analogy.
“We are convinced that we are still in the early phases of a new technology cycle, which is poised to deliver additional strong performance.”
Peter Oppenheimer, chief global equity strategist at Goldman Sachs
According to Goldman Sachs, by 2025, investments in artificial intelligence could increase significantly and reach $200 billion globally. This increase is related to the large business prospects offered by generative AI, a kind of AI that focuses on producing content using extensive language models. Previous estimates put the economic impact of generative AI at up to $4.4 trillion.
Despite the setback in 2022, AI stocks have performed admirably this year, helping the S&P 500 index as a whole to rebound. The market-leading stocks’ valuations are not as high as they were during previous times, such as the internet bubble that burst in 2000, the survey claims. The research also notes that the balance sheets and returns on investments of these businesses are very strong.
Although the picture seems promising, some experts urge caution when considering investing in the AI business. The PEARL framework was developed by Oppenheimer to help people make well-informed decisions after conducting extensive research.
