{"id":439974,"date":"2026-10-13T19:27:56","date_gmt":"2026-10-13T12:27:56","guid":{"rendered":"https:\/\/www.swingfish.trade\/blog\/market-news\/is-the-ai-bubble-bursting-439974\/"},"modified":"2026-10-13T19:27:56","modified_gmt":"2026-10-13T12:27:56","slug":"is-the-ai-bubble-bursting","status":"publish","type":"post","link":"https:\/\/www.swingfish.trade\/blog\/market-news\/is-the-ai-bubble-bursting-439974\/","title":{"rendered":"Is the AI bubble bursting?"},"content":{"rendered":"
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Nostradamus has been dead for centuries, but his followers are still around, especially in finance, with Ray Dalio warning that the AI bubble may be close to bursting<\/a> as interest rates rise and tech companies take on massive debt to build AI infrastructure.<\/p>\n

Are we heading for another dot-com crash?<\/p>\n

Things do seem to be getting murkier for the sector, with OpenAI\u2019s annualized revenue reaching around $50 billion at the end of September, $20 billion below the previously expected $70 billion. As concerns grow that AI demand may be slowing and revenues may not justify massive infrastructure investments, Oracle, Microsoft, and Nvidia shares<\/a>, alongside the Nasdaq-100, have naturally come under pressure.\u00a0<\/p>\n

This week, selling pressure also spread to semiconductor and tech stocks across Asian markets. Chinese chipmaker CXMT\u2019s progress in developing a new memory architecture has raised concerns about growing competition for global memory makers. On top of that, Broadcom\u2019s CEO compared AI investors to casino gamblers, suggesting some don\u2019t fully understand what they\u2019re betting on, and warned that financing AI infrastructure could become a major challenge.<\/p>\n

Looking ahead, high Treasury yields could add fuel to the fire by making riskier AI stocks less attractive to investors.\u00a0<\/p>\n

Still, this isn\u2019t a classic bubble, as massive infrastructure spending is backed by real growth in revenue, orders, and contract backlogs. Microsoft\u2019s Azure, for example, has surpassed $100 billion in annual revenue, AWS has posted its fastest growth in years, and Celestica and AMD are also seeing strong demand for AI infrastructure.\u00a0<\/p>\n

In other words, unlike in a typical bubble, companies aren\u2019t betting on demand that may never materialize. They\u2019re trying to keep up with demand that already exceeds capacity. At the same time, tech giants remain highly profitable and have ample cash to fund record investments without seriously risking their financial stability.<\/p>\n

Still, the risks remain, as these massive investments have yet to pay off and high valuations \u2014 exceeding $2 trillion in the case of the upcoming Anthropic IPO<\/a> \u2014 leave the sector vulnerable to growth disappointments, making this an important factor to consider when shaping your investment strategy.\u00a0<\/p>\n

The next big test for the sector will be earnings season. By the way, this week, besides JPMorgan, Goldman Sachs, Wells Fargo, Citigroup, Bank of America, Morgan Stanley, and BlackRock, ASML and TSMC will also report, giving us a better idea of whether the AI boom still has legs.\u00a0<\/p>\n<\/p>\n

This article was written by IL Contributors at investinglive.com.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"

Nostradamus has been dead for centuries, but his followers are still around, especially in finance, with Ray Dalio warning that the AI bubble may be close to bursting as interest rates rise…<\/p>\n","protected":false},"author":216,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[86],"tags":[],"class_list":["post-439974","post","type-post","status-publish","format-standard","hentry","category-market-news"],"_links":{"self":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439974","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/users\/216"}],"replies":[{"embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/comments?post=439974"}],"version-history":[{"count":0,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/posts\/439974\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/media?parent=439974"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/categories?post=439974"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.swingfish.trade\/blog\/wp-json\/wp\/v2\/tags?post=439974"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}