Oaktree's Howard Marks says AI frenzy isn't a bubble — at least not yet

Core Viewpoint - Veteran investor Howard Marks does not currently label the artificial intelligence boom as a bubble, stating that while valuations are high, they are not excessively so [1][2]. Group 1: Valuations and Market Sentiment - Marks acknowledges the high valuations of AI-related stocks but emphasizes that high prices do not equate to a bubble [1]. - He notes that investor enthusiasm for AI stocks has led to historic highs in valuations for chipmakers and software companies, driven by fear of missing out [2]. - Marks believes that current investor optimism does not necessarily indicate irrational exuberance [2]. Group 2: Historical Context and Psychological Patterns - A comparison is drawn to the late 1990s internet boom, which transformed the world but also resulted in many worthless companies [3]. - Marks warns that psychological patterns seen in past bubbles often reappear, where investors assume current leaders will remain dominant and that even underperformers will succeed [3]. - He highlights the flawed logic of backing companies with minimal chances of massive success, labeling this as "bubble psychology" [4]. Group 3: Future Outlook on AI - Marks expresses confidence in the potential of AI, suggesting it is likely to deliver significant advancements, although the specifics remain uncertain [4]. - He concludes that the current AI rally does not exhibit manic behavior typical of bubbles [4].