Freedom Experts Do Not Consider AI Stocks Rally as a Market Bubble

The current surge in the shares of artificial intelligence (AI) related companies does not show signs of a classic market bubble, noted Freedom Broker analysts in their weekly review of the US stock market.

The experts are confident that the valuations of the largest sector representatives remain at levels that can be explained by strong revenue and profit growth rates. Analysts do not see significant overheating in key market multiples.

Special attention in the review was given to the semiconductor sector. Freedom Broker believes that the rally in chip manufacturers retains a fundamental basis due to robust demand for computing power for AI applications.

Among the main beneficiaries of the trend, analysts highlighted Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), Micron Technology (MU), Marvell Technology (MRVL), Taiwan Semiconductor Manufacturing (TSM).

Experts also noted the high potential of companies that manufacture equipment for semiconductor production. This list includes Applied Materials (AMAT), Lam Research (LRCX), KLA Corporation (KLAC), Onto Innovation (ONTO).

According to Freedom Broker, the current situation differs from the dot-com bubble period of the late 1990s. The main capitalization growth today is driven by companies with sustainable profits, significant cash flows, and strong product demand from corporate clients.

Analysts expect investor interest in the AI segment to remain high in the coming quarters. The sector could receive additional support from further expansion of investments in data centers, cloud technologies, and AI infrastructure.

Not an individual investment recommendation.