AI Business
Aug 16, 2026
Analyst suggests AI market is experiencing multiple sequential bubbles
Aug 16, 2026
AI Summary
Dhaval Joshi, a strategist, argues that the AI market is not just one bubble but a series of rolling bubbles that inflate and deflate rapidly. He highlights the volatility in sectors like software, silver, and semiconductors, suggesting that current market dynamics reflect a misjudgment of value capture in AI.
- Dhaval Joshi, former chief strategist at BCA Research, claims the AI market is characterized by a sequence of bubbles rather than a single bubble.
- He notes that investors are frequently misjudging which sectors will benefit from AI, leading to rapid price fluctuations.
- Joshi cites examples such as the software sector, where initial optimism about AI's productivity potential led to a crash as investors recognized threats to the SaaS model.
- The price of silver also experienced a boom and bust, driven by its perceived value in data centers, but failed to justify its price increase.
- Semiconductor stocks rose due to expectations of high profit margins, but Joshi predicts a decline as market conditions normalize.
- He distinguishes between an earnings bubble and a profit margin bubble, suggesting that high margins may not be sustainable.
- Joshi emphasizes that the current market behavior resembles a mania, with rapid inflations and deflations occurring across various sectors.
- He identifies risks that could disrupt this pattern, including rising interest rates, a sharp decline in capital expenditure, or a significant recession.
- Joshi proposes three potential outcomes for AI value capture: dominance by corporations with strong market positions, individual professionals leveraging AI for efficiency, or intense competition leading to lower prices for consumers.
- He also mentions a surprising surge in DDR3 RAM prices as a potential new bubble candidate and speculates on the future of crypto in relation to AI advancements.
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