Latest news with #AIhype
Yahoo
6 days ago
- Business
- Yahoo
Why the AI stock bubble may be just getting started
Valuations for the biggest stocks in the S&P 500 (^GSPC) are starting to look stretched, raising fresh concerns about concentration risk. Chad Morganlander, senior portfolio manager at Washington Crossing Advisors, breaks down why we may be in the early stages of a bubble and how artificial intelligence (AI) hype fits into long-term expectations. To watch more expert insights and analysis on the latest market action, check out more Opening Bid here. Are we witnessing another tech stock bubble? I put this to Apollo chief economist Torsten Slok. Here's what he said. I do think that we'll have a lot of growth, but it looks somewhat extreme to me that the valuations for those significant big stocks in the S&P 500 which make up such a big share of the overall S&P 500 is at these very high levels relative to where we were in the IT bubble where the valuations of the 10 biggest companies in the S&P was a lot lower. So, I do think that there is a bubble from a PE ratio perspective, because these companies have just become so expensive and it's become so concentrated for investors that it's really no longer diversified investment to buy the S&P 500. All right. Still with me is my round table Chad Morganlander of Washington Crossing Advisors and Yahoo Finance senior reporter Alexandra Canal. And Ines Ferre. Chad, over to you on this one. You never know if you're in a bubble until after the fact, right? Yeah, correct. And in fact, uh, your, your clip there was correct. Uh, you are sitting at a 23 multiple. So you during the earlier stages of a bubble. Living through the 90s, one must recall that the S&P earnings or PE multiple got over 30 times, uh, in 1999. Uh, so there will be, look, when you look back at this time, there will be a lot of mal investment made, some silly investment ideas that, that didn't work out. But over the long run, over the next 10 to 15 years, uh, this excitement about artificial intelligence is justified. It's just a matter of the, the, the, the valuation gap and where that valuation gap meets, uh, the reality of, of earnings. Well, it sounds like, Chad, if you want to compare it to the internet craze, we still have more to go in terms of valuations, at least from a PE perspective. Well, that could be true. Uh, again, you know, buyer beware on the type of companies that you're buying. Uh, at Washington Crossing Advisors, we own Alphabet, for example. That's trading at roughly about a 17 times multiple when you look at, when you take, when you take away cash. Um, full disclosure, not only do we own it in our portfolio, but I personally own it. But that company has a full competitive stack to go against OpenAI. Ines, I haven't covered a good bubble in a while. Uh, the last one I covered was cannabis a couple years ago. Every day, cannabis stocks would go up until, well, they did it. Maybe it's time, uh, we do get a bubble bursting and maybe it does start with AI. And we could, for sure. Uh, this is probably different than cannabis, uh, because it is touching all sorts of industries. I mean, if you take a look right now at the different sectors of the S&P 500, you are seeing industrials, which is leading the way. Think big construction, factories, AI centers. Uh, you're seeing tech. You're seeing utilities, which is usually the sleepy part of the market. Utilities is, uh, outperforming the broader market. And then, of course, you're seeing financials as well. So you can tell that it is touching all parts of the market right now. And if you think in the future, like what Chad was saying earlier, um, look, long term, this will be a huge productivity boom for the entire economy. Uh, because just imagine having endless amounts of workers at your disposal, endless amount of AI bots that are doing work for you. And this is not just about AI bots, then you're talking about, uh, later on, having robots doing everything. I mean, this is going to be a massive, massive productivity move. But yes, we could be in a bubble right now. We will see, we would see it deflate, but then we would see, uh, exponential growth. Right on, Ines. I need a thousand personal digital assistants. Thank you. Thank you. And I'm going to get those someday because of AI. Related Videos Amex earnings: What credit card cos. reveal about the US consumer The odds of Trump firing Powell are 'quite low,' perhaps 'zero' Netflix stock slips despite Q2 beat: How valuation factors in How Volvo plans to navigate tariffs with a new product focus Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Entrepreneur
25-06-2025
- Business
- Entrepreneur
The Agentic AI Dilemma: Promise, Pitfalls, and Practicality
At this early stage, agentic AI can only be pursued where it delivers clear value or ROI Opinions expressed by Entrepreneur contributors are their own. You're reading Entrepreneur India, an international franchise of Entrepreneur Media. "A lot is happening in terms of Agentic AI." This headline is everywhere but is it truly happening, or is it just another misleading hype in the tech world? Gartner has termed this trend as "agent washing"—the rebranding of existing tools such as AI assistants, robotic process automation (RPA), and chatbots, without any substantial agentic capabilities. According to Gartner's latest report, more than 40 per cent of agentic AI projects will be cancelled by the end of 2027 due to escalating costs, unclear business value, or inadequate risk controls. Of the thousands of vendors claiming to offer agentic AI solutions, Gartner estimates only around 130 are legitimate. "Most agentic AI projects right now are early-stage experiments or proof-of-concepts driven largely by hype and often misapplied," said Anushree Verma, Senior Director Analyst at Gartner. "This can blind organisations to the real cost and complexity of deploying AI agents at scale, stalling projects before they move into production. They need to cut through the hype to make careful, strategic decisions about where and how they apply this emerging technology." The high cost of agentic AI One of the major barriers to meaningful adoption is cost. So how much does it actually take to build agentic AI? "For enterprises starting from scratch, developing Agentic AI internally could cost anywhere between INR 50 crore to INR 200 crore (approx. USD 6 million to USD 24 million) over 3–5 years, depending on scale, vertical, and use case," said Apurv Agrawal, Co-founder and CEO, SquadStack. "And even then, you're not guaranteed deployment success unless your systems are robust, your data flywheels are strong, and your change management is bulletproof." So, what will it take? Despite these early-stage challenges, the potential of agentic AI is immense. Gartner predicts that by 2028, at least 15 per cent of day-to-day work decisions will be made autonomously by agentic AI up from zero in 2024. Additionally, 33 per cent of enterprise software applications are expected to include agentic AI by 2028, compared to less than one per cent in 2024. To prepare for this transformation, organisations must adopt significant mindset and infrastructure shifts. The voices in the Indian AI space weighed in: Ganesh Gopalan, Co-founder & CEO, Gnani AI explained, "To effectively integrate Agentic AI into their operations, organisations must cultivate a mindset that embraces autonomy, continuous learning, and cross-functional collaboration. We often say that automation isn't AI and while many companies stop at basic task automation, what's truly needed is AI that works, understands, reasons, and adapts in real-time to deliver business outcomes." "To support this, companies need to leverage API-first, modular system designs, which enable flexibility, allow for rapid development, and orchestrate AI workflows seamlessly across business areas while maintaining an engaging, human-like experience. Ultimately, businesses must understand that AI is not just a tool for automated responses but a way to improve and personalise customer engagement," added Beerud Sheth, Co-founder & CEO, Gupshup. However, at this early stage, agentic AI can only be pursued where it delivers clear value or ROI. "To get real value from agentic AI, organisations must focus on enterprise productivity, rather than just individual task augmentation," Verma said. "They can start by using AI agents for decision-making, automation for routine workflows, and assistants for simple retrieval. It's about driving business value through cost, quality, speed, and scale."
