#AI#GenerativeAI#AIHype#BigTech: "The so-called Magnificent Seven companies have driven AI enthusiasm and stock market gains over the past year. They have pushed the concentration of the S&P 500 to a historic extreme. But as a recent Morgan Stanley Wealth Management report notes, “index concentration has historically proved self-correcting, with some combination of regulatory, market and competitive forces, along with business cycle dynamics, undermining static leadership”. The report says “analysis suggests that equity returns have typically struggled following peaks in concentration”.
That combination of correcting factors might include the growing number of Big Tech antitrust cases and the possibility that carbon pricing and copyright fines will challenge the “free” inputs necessary to make a profit.
Whether you see AI as the next tulip bubble or the next combustion engine, it’s worth questioning how the market is pricing this story."
