Is AI fueling a stock market bubble? We debate it.

Valuations - The Shiller P/E ratio is currently above 40, which is higher than during the dot-com bubble, indicating potential overvaluation risks [4] - Adjusting valuation measures for profit growth, cash flow, and profit margins suggests that parallels to the dot-com era are weaker than they appear [5] Company Quality - Companies leading the AI revolution, such as Nvidia, Microsoft, and Amazon, exhibit stronger financial health with better cash flow, efficiency, and profitability [6] - The dominance of the largest companies, referred to as the "Mag 7," poses a concentration risk, as they account for over one-third of the S&P 500 [7]