Two market analysts caution of potential ‘massive correction’ on the horizon according to Investing.com

Two market analysts caution of potential ‘massive correction’ on the horizon according to Investing.com

Market watchers Vital Knowledge have warned that the current frenzy around artificial intelligence (AI) could be headed for “a huge correction”, comparing the current market situation to that of the dotcom bubble of the late 1990s. 1990s and early 2000s.

Specifically, market commentators note that while the technology behind AI is undeniably real and the investment in it is substantial, the main AI tools getting attention are consumer-facing and serve largely proof of concept rather than offering a solid return on investment. -the investment benefits (ROI) that companies seek for large-scale deployment.

“This gap between massive investments in infrastructure and public services could lead to a huge correction, much like what happened in the late 90s and early 2000s with the Internet (Internet and browser were more revolutionary than even the most optimistic could have imagined, but the process was neither instantaneous nor linear),” the analysts wrote.

Nonetheless, analysts pointed out that Google (GOOGL) is a case where the consensus may be underestimating the company’s resilience and capacity for innovation.

Google’s search and other core services remain unchallenged, with no obvious loss of market share to AI-focused competitors, even in the face of Bing’s collaboration with OpenAI, they said.

Additionally, the company’s AI capabilities are significant “and its AI-related products will likely only improve in the future,” the analysts noted, highlighting the potential partnership from Alphabet (NASDAQ: ) in AI with Apple (NASDAQ:). This would not only strengthen Google’s position in the AI ​​space but also assert its technological prowess.

Meanwhile, another market commentary provider, Stock Trader’s Almanac, maintains an optimistic outlook for 2024, predicting that most of the market’s growth will take place during the second half of the year.

However, analysts expect “some consolidation and/or weakness during the second and third quarters” before the next step.



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