AI Bubble? Morgan Stanley Says Artificial Intelligence Is A Secular Investment Trend For The Next Decade

Zinger Key Points
  • Morgan Stanley determined the performance of the AI index doesn't align with typical patterns before the peak of historical bubbles.
  • AI is predicted to revolutionize various sectors.

Morgan Stanley on Tuesday said that artificial intelligence (AI) and its related technologies are poised to revolutionize various sectors, dubbing it a pivotal investment trend for the upcoming decade.

What Happened: The financial institution delved into the possibility of the current surge in the AI sector could lead to a bubble, Coindesk reported.

The firm determined the performance of the AI index doesn't align with the typical patterns observed before the peak of historical bubbles.

A secular investment trend is defined as a persistent trend that remains unaffected by market fluctuations.

Analysts Edward Stanley and Matias Ovrum commented, "In the absence of knowing the date of the peak of the current AI bull-run, we assume the generative-AI fuelled market rally to have started with the launch of ChatGPT and so measure the current rally from December."

Also Read: PayPal Stablecoin Scammers Are Ripping Off Investors Left And Right - Here's How

The report indicated traditional investment bubbles usually witness a median surge of 154% in the three years leading up to their peak, and on average, an increase of 217%.

Why It Matters: Although AI frontrunners like Nvidia Corp NVDA have seen a rise of over 200% this year, broader AI indices have only experienced a growth of around 50%, not surpassing their 2021 peaks.

The research emphasized the unique attributes of AI, stating, "Stickiness and breadth of diffusion set AI apart from prior hype cycles."

On a related note, another financial powerhouse, Goldman Sachs, forecasted that the influence of AI on the U.S. economy will become significantly noticeable between 2025 and 2030.

Read Next: Bitstamp Taps Galaxy Digital To Raise Funds For Expansion Efforts In Europe, Asia

Join Benzinga's Future of Digital Assets in New York city on Nov. 14, 2023, to stay updated on trends such as AI, regulations, SEC actions and institutional adoption in the crypto space. Secure early bird discounted tickets now!

Photo: Shutterstock

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: CryptocurrencyNewsMarketsTechAIartificial intelligenceFinancial TechnologyGoldman SachsMorgan StanleyU.S. Economy
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!