AI concept stock trend caused hot debate

Recently, Black Swan investor Mark Spitznagel said in an interview with the Wall Street Journal that the stock market is in a bubble and is heading for a historic sell-off, including the stock market where AI concept stocks are located. He pointed to similarities between the current stock market rally and the dot-com bubble, arguing that the multi-year rally in the stock market amounts to "the biggest bubble in human history" and predicting that stocks could lose more than half their value and that the correction could be more severe than it was 25 years ago. Mark Spitznagel's opinion has aroused widespread attention and heated discussion among the industry and investors.

Mark Spitznagel is the founder of Universa Investments, a well-known black swan fund. In addition to the spectacular results of his tail-risk hedge fund, which made $1 billion in a single day and returned 3,612% in March 2020, for a total return of 4,144% since the year, his views are notable because he has not relied on any short-term perspective to achieve these results. Spitznagel is a former trader and protege of "Black Swan" author Nassim Nicholas Taleb. His fund aims to profit from tail risk, which is risk that is unlikely to occur but would be costly if it did. He achieves high returns by reducing risk, most fundamentally by ensuring that the fund is protected from systemic stock market crashes and general crises. In the absence of significant fluctuations in the market, the Fund maintains a state of no loss; Once the market falls sharply or even crashes, the fund will make huge gains. For example, in the 2008 financial crisis before the layout, heavy short positions, in August 2015 through options in advance of the layout of short positions in US stocks.

Whether there is a bubble in AI concept stocks and whether the bubble is about to burst is a controversial issue. From some market indications, AI concept stocks do face some challenges and adjustments. In the first half of 2023, after AI concept stocks experienced a sharp rise, there was a reduction tide. In the A-share market, many companies in the artificial intelligence circuit have issued announcements of reducing their holdings, and some companies even go out of reality to control the "divorce tide" to reduce their holdings in disguised form; In terms of performance, the performance of listed companies in the AI sector is also generally more severe, and nearly half of the companies' net profit declined year-on-year. In the United States, some AI giants have recently performed weak, and the stock prices of companies such as Nvidia have suffered a correction, and they suffered intensive reduction in June. In addition, the growth rate of visits to ChatGPT, the source of the AI wave, has decreased significantly, and the average visit time of users has also decreased. Spitznagel argues that central bank intervention and currency manipulation lead to damaging bad investments that build up over time. The global economy now faces unprecedented levels of debt, and near-zero interest rates have created a huge economic credit bubble that, if it bursts, will lead to catastrophic market failures. He also pointed out that the stock market crash is a direct result of overvaluation, while the U.S. stock market could go higher, but the market is currently overvalued, and this is the remaining tail risk in the stock market.

However, there are also views that AI-related industries still have broad space for development in the future. AI technology can play an important role in various industries, and with the further development of the technology and the expansion of application scenarios, more robust and sustainable growth is expected to be achieved. Jim Covello, head of equity research at Goldman Sachs, believes that companies' investment in AI will not necessarily trigger the next economic revolution, and the bubble in AI concept stocks will eventually burst, but it may not be this year or even next year. Shanghai Academy of Social Sciences Economics Doctor Wang Yingbo said that AI as a powerful tool and leverage, on the one hand will promote rapid economic development, on the other hand will lead to continued differentiation, profits will be highly concentrated in a small number of head enterprises, most of the current artificial intelligence enterprises will continue to die out in the long run, no investment value, but the head enterprises have a huge space for development.

It should be noted that the market situation is complex and changeable, and the future development of AI concept stocks is uncertain. Spitznagel's views and investment strategies, while moderately successful in the past, do not guarantee future returns. When making investment decisions, investors need to comprehensively consider a variety of factors, including technological progress, the company's actual performance and competitiveness, market expectations and macroeconomic environment, etc., and maintain risk awareness and choose appropriate investment strategies. At the same time, pay close attention to the industry dynamics and the development of related companies, and adjust in time according to their own risk tolerance and investment objectives. Make prudent decisions.