Is There an AI Bubble?

AI is everywhere in the headlines, and stocks are near record highs. It’s fair to ask: is this dot-com all over again? We take that question seriously, because prices and enthusiasm can both run hot. We believe clarity beats noise. The goal isn’t to call the top. The goal is to benefit from innovation while protecting your plan.

The Spending Is Real

AI spending is massive and real. Trillions are flowing into data centers, GPUs, and talent. That investment is already a noticeable boost to overall economic growth. Some deals look circular. For example, one company funds a lab that then buys that company’s chips.

These relationships raise good questions about what happens if enthusiasm cools. But this also reflects AI’s heavy infrastructure needs. Few firms can build it alone. The bet is that the value created will justify the cost over time.

Lessons From Past Tech Waves

It’s hard to tell growth from a bubble in real time. In the late 1990s, many zero-revenue companies were worth billions. That was a bubble—yet the internet still transformed everything. Cloud computing was doubted a decade ago, too. Today it quietly powers how business gets done. Markets can mis-time the payoff even when the technology is real.

One difference today: many AI leaders are profitable, established companies with strong balance sheets. Think Microsoft, Alphabet, Meta, and others. That doesn’t erase risk, but it changes the foundation. Even true revolutions take time to pay out. Railroads, electrification, electronics, and the internet all followed a similar pattern. Big excitement, big investment, then a reset as adoption took longer than hoped—followed by lasting change.

Productivity gains don’t arrive overnight. Companies have to redesign workflows, retrain people, and rebuild systems. That’s messy, and markets don’t always wait patiently. Valuations reflect high expectations. The S&P 500 has traded around a price-to-earnings ratio that is not far from prior peaks. The question isn’t “is AI real,” but “how fast and how much do profits show up.”

What This Means for Your Plan

So what should you do? Anchor your portfolio to your plan, not to headlines. Position to participate—without betting the house. We design portfolios to benefit from innovation over the long run. At the same time, we balance income needs and risk. That means we won’t capture every last dollar in a tech surge, and that’s by design.

Money you’ll need soon should not swing much. For near-term goals—withdrawals over the next few years, tuition, a remodel—we favor lower-volatility strategies like high-quality bonds, short-duration Treasuries, and cash alternatives for income and stability.

Longer-dated goals can take more market risk because they have time to recover. As each goal gets closer, we steadily dial risk down so the money is there when you need it.

Our ongoing process matters as much as the initial setup. We rebalance to keep winners from becoming overweights. We manage taxes so your after-tax return matches your real-life goals.

Bottom Line

We believe a calm, rules-based approach beats prediction. Markets will swing as AI moves from promise to productivity. Your plan should be built to handle both.

AI is likely a genuine, long-term shift. The path from here to there may be choppy and slower than the hype suggests. Let’s position you to benefit without losing sight of risk.

If you want a straightforward plan for this environment—one built for you, not for today’s narrative—let’s talk.