Part 3/10:
Powell’s remarks coincide with widespread reports of an AI investment surge. Major tech giants such as Microsoft, Nvidia, Apple, Google, Meta, Amazon, and Tesla collectively comprise roughly 30% of the S&P 500’s value—a concentration that raises questions about whether the market is experiencing a bubble. This observation echoes past economic bubbles, such as the dot-com boom, where massive spending on the internet reshaped global industries—and, eventually, created both winners and losers.
Financial estimates reveal that nearly all of the S&P 500’s 7% annual CapEx growth is rooted in AI investments. This pattern of aggressive spending, reminiscent of historical speculative bubbles, signals an unprecedented level of focus and urgency on AI development and deployment.