Investors have rushed into artificial intelligence (AI) stocks this year, potentially overestimating its near-term impact, according to Vanguard, the second-largest asset manager globally. Joe Davis, Vanguard’s chief economist, warns of a potential market correction, noting that while AI could be transformative, current market valuations suggest a higher probability than what is realistically probable.
Shares of AI-linked companies have surged, with Nvidia leading the charge, but Davis cautions that these companies may not ultimately benefit the most from AI’s transformative potential
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