Allianz – AI: Bubble or Boom?

The report examines whether artificial intelligence (AI) represents a speculative bubble or a sustainable boom.

It analyzes the valuations of AI-related firms, noting that the combined market capitalization of top AI firms reached USD 25 trillion in early 2026. Although some valuations approach the peak levels of the dotcom era in 2000, the overall market remains below those extremes. A key difference from the dotcom bubble is that many current AI leaders are highly profitable, generating significant revenues and investing in future infrastructure, making their valuations more viable. The report compares current mega-cap tech firms’ valuations and earnings growth trajectories to those during the dotcom era, finding that today's valuations are about 20% below the dotcom peaks. High earnings expectations in AI are largely driven by anticipated gains in the semiconductor industry. The report concludes that despite high price-to-earnings ratios, the current AI market does not exhibit the same bubble risk as during the dotcom boom.