Are we in an AI bubble?

[funkervogt]

The LLM becoming AGI in the future was always a bad assumption. So if anyone expected this, then i can understand why they think there is an AI bubble. I already predicted that in the 2024 prediction that this would not occur, and if someone were to fail and go bankrupt in the next 5 years, my bet is on OpenAI.

I'm planning to buy Alphabet, Nvidia, Microsoft, and Palantir during the dip.

[raklian]

The LLM becoming AGI in the future was always a bad assumption. So if anyone expected this, then i can understand why they think there is an AI bubble. I already predicted that in the 2024 prediction that this would not occur, and if someone were to fail and go bankrupt in the next 5 years, my bet is on OpenAI.

I'm planning to buy Alphabet, Nvidia, Microsoft, and Palantir during the dip.

QQQ or a niche EFT (ARK, etc.) is safer. The magnificent 7 could easily be replaced in a world where innovation is increasingly automated and chaotic. Stock of a failed company usually suddenly drops with a huge red candle rather than steadily decline. If you absolutely need to invest in individual stocks, you could create a small allocation in your overall portfolio to cap risk.

[Solaris]

The LLM becoming AGI in the future was always a bad assumption. So if anyone expected this, then i can understand why they think there is an AI bubble. I already predicted that in the 2024 prediction that this would not occur, and if someone were to fail and go bankrupt in the next 5 years, my bet is on OpenAI.

I'm planning to buy Alphabet, Nvidia, Microsoft, and Palantir during the dip.

QQQ or a niche EFT (ARK, etc.) is safer. The magnificent 7 could easily be replaced in a world where innovation is increasingly automated and chaotic. Stock of a failed company usually suddenly drops with a huge red candle rather than steadily decline. If you absolutely need to invest in individual stocks, you could create a small allocation in your overall portfolio to cap risk.

How could the magnificent 7 be replaced? Besides Nvidia, who has some pressure from the other hyperscalers trying to make their own chips to become less reliant on Nvidia, no one has any real competition. There is no search engine that is massively adopted other than Google Search, Everyone still uses Microsoft Office, Everyone still uses Facebook+instagram as their social media platform and so on. It seems like a baseless claim based on assumptions that do not have any merit to reality. It's more likely that the magnificent 7 will be even more dominant as their pockets are endless, and as we move further towards AGI, it becomes more difficult for smaller companies to break out as the large ones will just crush them, which they are already doing.

The next 1 trillion market cap companies will be in areas, which the current mag 7 do not cover currently and in the future. Think SpaceX and ASTS in the space sector, or Robinhood and Coinbase in the blockchain sector.

However recommending QQQ is correct if your intention is to minimize risk.

[Cyber_Rebel]

Comparing how things were 3 years ago when LLMs were still "new" to the public, I think we've come a long way already.

Yes. Thinking back to when I first used GPT-3.5 for web coding, I remember the outputs lasted about 30 seconds before cutting off. And they often contained errors.

These days, it can "think" for several minutes (and 20+ minutes in the case of Deep Research), handling multiple files (often with 1,000+ lines of code), faster and way more accurately. Since 5.0 in particular, it requires a lot less trial-and-error and tends to just output the correct answer I need. It now provides incredibly clear and helpful "before and after" guides, so I know precisely where to insert or remove code.

I wonder what the impact on the jobs market will be. I'd certainly be worried if I were a junior web designer/developer (a career I almost pursued before my current role).

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I've had something similar happen to me too, especially when giving 5.2 Pro loads of context (files and images) and the role of a project manager to carry out the task object sequentially. Also worth noting people were always saying LLMs could never do Math and Coding, thinking there was some architectural issue even. And now, we have open-source models much above even GPT-4's era and those prior mentioned skills are the two domains where frontier models excel at.

I suspect should LLMs actually do become "Innovators" or are able to come up with real breakthroughs, either smaller one next year or whatever constitutes as "medium" breakthroughs in 2028, the labs may be hoping this staves off any AI bubble we might be within. I suppose it depends on how quickly a scientific breakthrough in whatever relevant field can become economically viable.

For entry levels or those in the midst of procuring an education or degree, having AI in the mix of that is the more pragmatic approach. The senior devs won't be around forever (unless LEV) and should consider retraining new entrants.

[caltrek]

To demonstrate how complicated the situation is and how much guess work is involved in answering the question:


With the Stock Market Flashing a Clear Warning to Investors, Are There Reasons to Continue to Be Optimistic?
By Neil Patel
December 21, 2025

Extract:

(The Motely Fool) You're probably thinking that putting money to work right now is a mistake, since the CAPE (cyclically-adjusted price-to-earnings) ratio clearly indicates that forward returns will be wildly disappointing. That perspective is justified. However, investors should remain optimistic.

The market is just different these days. The companies leading the charge are dominant technology enterprises with wide economic moats, global operations, mission-critical products and services, sizable free cash flows, and very scalable business models. A valid argument can be made that they deserve higher valuations.

Moreover, assets under management in passive investment vehicles exceeded those in active funds in the U.S. at the end of 2023, so there is a lot of money coming from retail investors, creating more demand to buy the most valuable stocks. This has been spurred by fee-free trading and a proliferation of low-cost index funds and exchange-traded funds.

We also have to think about fiscal and monetary policy. Historically low interest rates throughout much of the past decade, coupled with an ever-expanding federal debt balance and money supply, have led to constant currency debasement. This will likely keep leading to higher asset prices.

Read more here: https://www.msn.com/en-us/money/saving ... 4c&ei=101

[wjfox]

Amazon plunges 9%, continues Big Tech’s $1 trillion wipeout as AI bubble fears ignite sell-off

Fri, Feb 6 2026

Amazon shares sunk more than 9% on Friday after the company’s hefty spending forecast surprised investors who were already wary that the artificial intelligence boom is at risk of becoming a bubble.

The e-commerce company on Thursday was the latest tech giant to announce plans for a massive increase in capital expenditures, after Google parent Alphabet, Microsoft and Meta all signaled they expect their spending sprees to continue.

Amazon, Alphabet, Microsoft and Meta reported about $120 billion in capital expenditures in the fourth quarter alone. That figure could exceed more than $660 billion this year, the Financial Times reported, which is higher than the gross domestic product of countries like the United Arab Emirates, Singapore and Israel.

Wall Street has responded differently to the companies’ spending plans, cheering Meta and Alphabet’s forecasts, while punishing Amazon and Microsoft.

Amazon, Microsoft, Nvidia, Meta, Google and Oracle collectively shed more than $1 trillion from their valuations over the past week, according to FactSet data.

https://www.cnbc.com/2026/02/06/ai-sell ... racle.html