(Bloomberg) — The bubble that has formed in US Big Tech stocks over the past two years has further to run and investors should position for more gains, according to Bank of America Corp. (BAC)strategists. A BofA team led by Michael Hartnett studied 10 equity bubbles since the start of the previous century, finding that these periods of extreme overvaluation produced average trough-to-peak gains of 244%. That suggests that, after rising 223% from their March 2023 low, the so-called Magnificent Seven cohort ...

(Bloomberg) — For anyone concerned that artificial intelligence is fueling a bubble in technology stocks, Oracle Corp. (ORCL) has entered the conversation. Shares of the database software company have soared 84% this year, the seventh-best performance in the S&P 500 Index (^GSPC), as scorching demand for AI computing turbocharges its revenue growth. The latest leg of the rally came after Oracle projected revenue in its cloud-computing business will jump 700% in the next three fiscal years, sending the sto ...

Group 1 - Several stocks in the quantum computing sector, including IonQ, Rigetti Computing, D-Wave Quantum, and Quantum Computing, are trading at historically high valuations, with significant price increases over the past year [1][2] - IonQ's stock has risen by 517%, while Rigetti, D-Wave, and Quantum Computing have surged by at least 1,500% as of July 21 [2] - The valuation multiples of these quantum computing stocks are significantly higher than those seen during previous market bubbles, such as the dot-com and COVID-19 bubbles [5][6] Group 2 - IonQ, Rigetti, D-Wave, and Quantum Computing are trading at historically high price-to-sales (P/S) multiples, raising concerns about a potential bubble [6][7] - Other AI companies exploring quantum computing, like Nvidia, Amazon, Alphabet, and Microsoft, have more reasonable valuation multiples compared to the smaller quantum computing players [6][7] - Recent capital raises by these companies, including IonQ's $1 billion stock issuance and Rigetti's $350 million capital raise, suggest management may be capitalizing on inflated market conditions [10][12] Group 3 - The quantum computing industry is characterized as research-heavy and capital-intensive, indicating that management's capital-raising efforts may reflect a belief that current price levels are unsustainable [12][13] - Historical trends suggest that a major correction could be imminent for smaller quantum computing stocks, as issuing stock to raise funds is not a sustainable long-term strategy [14] - For investors seeking exposure to quantum computing, it may be more prudent to consider diversified opportunities in larger tech companies rather than smaller, speculative players [15]

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