AI investment is booming. How much is hype? | CNN Business

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It’s not just big-money private investors hoping to cash in on the AI boom: Flows into the world’s top five AI-focused exchange-traded funds have ballooned by an average of 35% since the start of the year

“It may seem like a very big number,” he told CNN, but the company has big, global ambitions and needs a lot of expensive computing power to see that through, he said. The blowout deal is just one example of the feverish excitement surrounding the potential of “generative” artificial intelligence — which can create original text, images and other content in response to prompts from users — to generate whopping returns for investors.

Its stock has soared by 207% since the start of the year. But Nvidia’s stock has also traded on a price-to-earnings ratio — a measure of whether a share is over- or undervalued — of 237 over the past 12 months. The higher the ratio, the more likely a stock is overvalued. For comparison, companies on the S&P 500 have traded on an average ratio of 24 over the same period. While Nvidia is profitable, C3.

 

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