Is AI a Fad?

Relative market outperformance of stocks with tickers 'AI' and 'NVDA' is not justified and should be faded

Artificial Intelligence (AI) has made remarkable progress in recent years with the advent of new models like ChatGPT and AI-powered search engines. These developments have improved natural language processing, machine learning, and other AI fields, resulting in exciting new applications. However, the market hype surrounding these advancements may be overblown. While Google and Bing are trying to outdo each other in the search engine wars, we may be witnessing an overvaluation of AI tickers and companies like ‘AI’ and ‘NVDA’. As the market more efficiently prices this technology, we may see a collapse in these stock prices.