Two New Reasons to Stay Bullish on AI Stocks
Ever since ChatGPT’s grand debut launched the AI Boom in late 2022, pundits and skeptics alike have consistently called for the AI stock “bubble” to pop.
And it will, eventually. All booms end in busts. History makes clear that it is not a question of “if.” It is simply a question of “when.”
Just consider: the S&P 500 recently achieved back-to-back years of 20%-plus gains. It has only done that three times before: in 1935/36, 1954/55, and 1995/96.
After the two boom years in 1935 and ‘36, stocks immediately crashed about 40% in 1937. That boom turned into a bust almost immediately.
Following the market boom in 1954 and ‘55, stocks went flat in ‘56, then dropped 15% in 1957. The boom turned into a bust after about a year.
Similarly, post-1995/96, stocks kept partying throughout 1997, ‘98, and ‘99 – only to crash about 50% throughout 2000, ‘01, and ‘02. After about three years, that era’s big boom turned into a big bust as well.
Today’s AI Boom will play out no differently, eventually ending in a bust. At some point, AI stocks will crash, perhaps epically.
However…
We have reason to believe that’s not in the cards yet – and won’t be any time soon, for that matter…
Potential Game-Changers on the Horizon
We think AI stocks should continue ripping higher thanks to two new catalysts: Grok-3 and ChatGPT-4.5.
Just yesterday, Elon Musk and his startup, xAI, unveiled Grok-3, the latest iteration of the company’s AI model. And from the looks of it, Grok-3 is quite capable.
