Market Musings 10/9/2025
Quick thoughts on the markets and major portfolio news. Not on Ursa yet? Download Ursa from the App Store!
#AI boom drives markets, but could it end like a Dot-Com burst?
Investors are riding the #AI spending boom — but could it end like the dot-com crash?
Markets have been rallying this year, but #AI infrastructure buildout names have vastly outperformed. Even over the past month, the rally continued with a steady pace of data center investments news and optimistic management outlooks.
Are we in a bubble?
Cloud hyperscalers are definitely in a spending frenzy. Google, alone, plans to spend $85B in CapEx this year. That’s up from $53B last year and $32B the year before. That 60% jump is driving record sales for #AI data center suppliers.
However, 2026 won’t likely see the same growth. While analysts are projecting a massive $100B, that’s less than 20% growth from this year and may signal the initial #AI buildout ramp has peaked.
Meanwhile, #AI names are trading at historically high valuations with multiples roughly double what they were before.
We don’t dispute that #AI as a technology is transformative, but history may show the dangers of hype. The internet was a game-changer too, but investors clearly got ahead of themselves — leading to the dot-com bubble crash.
We definitely see a bubble, but the real question is how fast #AI monetization can catch up.
Many #AI companies hype users and usage, but actual revenue still lacks－very similar to the early internet. However, unlike the internet, we see #AI solutions so far as largely cost-replacement vs. new revenue markets.
Costs are another concern as #AI data centers are power hungry. The internet on the other hand was much lower cost.
Without near-term solutions, we could see the hype giveaway to buyers remorse and another dot-com bubble burst.
Bottom line: #AI as a technology is very promising, but the bubble risk is real. Not saying, the market’s crashing tomorrow, but solving #AI monetization and cost control will go a long way to soften any pullback.
No Ursa account yet? Download Ursa here!
As of the publish date, Ursa portfolios may own GOOG. The stocks mentioned in this article may cease to be owned by Ursa portfolios at any point.
The statements, opinions and analyses presented here are provided as general information. This article is the opinion of the author. Anything within this article should NOT be considered an investment recommendation or advice. See Ursa’s full disclosures here.
Original Photo by Pixabay.