According to Cointelegraph, Goldman Sachs has dismissed concerns of an artificial intelligence (AI) bubble, despite the recent surge in AI market interest and tech stock prices. Instead, the financial institution believes we are on the verge of an AI revolution. The rise in AI stock prices has led some to draw parallels with the late 1990s dot-com bubble, a comparison that Goldman Sachs strongly rejected in a recent publication.
Peter Oppenheimer, Goldman Sachs' Chief Global Equity Strategist, stated that we are still in the early phases of a new technology cycle poised to deliver strong performance. The firm forecasts a significant increase in global investments in AI, potentially reaching $200 billion by 2025. This surge is attributed to the economic opportunities presented by generative AI, a subset of AI focused on generating content using large language models, which could contribute up to $4.4 trillion to the global economy.
AI stocks have shown impressive performance throughout the year, contributing to the recovery of the entire SP500 index following the setback in 2022. The report states that the valuations of market-leading stocks are not as extended as seen in past periods, like the internet bubble that burst in 2000, and these companies have robust balance sheets and returns on investment. However, some specialists advise caution when considering AI sector investments, and Oppenheimer introduced the PEARL framework to assist individuals in making informed decisions after thorough research.