Bank of America analysts compare the current period on the stock market with the years before the crash in 2000.
After the powerful revaluation of some US technological stocks linked to the artificial intelligence (AI)especially Nvidia (whose capitalization is triple compared to a year ago), it is time to assess whether the market It has gone past braking.
The analysts of Bank of America They try to answer that question from the point of
After the powerful revaluation of some US technological stocks linked to the artificial intelligence (AI)especially Nvidia (whose capitalization is triple compared to a year ago), it is time to assess whether the market It has gone past braking.
The analysts of Bank of America They try to answer that question from the point of view of volatility. His theory is that, in the nine asset bubbles that the market has experienced since the 1920s, before their burst there was always a strong increase in price variations in the affected markets.
He gives as an example of this, among others, the crash of 1929the collapse of gold In the eighties, the collapse of the Japanese bag in the nineties, the crash of bitcoin in 2017 and the technological puncture of the year 2000. Between the beginning of the euphoria and the bust, the volatility in those periods multiplied between 1.3 times and 5.6 times.
The question is whether there is now any indication of increasing price fluctuations for magnificent seven of the S&P 500 or in other listed companies linked to the AI boom.
According to Bank of America, the answer is that we are not in that phase. “AI is causing a low correlation between those listed [las tecnológicas suben mucho más que el resto] as in the year 2000, but the Volatility says we are not in a bubble yet“concludes the Wall Street entity.
But it could all be a matter of time. “A bubble will be difficult to avoid given the significant but uncertain impact of AI on the global economy, “not unlike the Internet in the 1990s or the railroad in 1840.”
But returning to the comparison with the technological bubble, Bank of America believes that looking at the “volatility, returns and valuations” current, we are still “in 1995, more than in 1999.”
That is, they could remain five years bullish journey until reaching the puncture. But it’s better to be prepared in case it arrives sooner.
