Rudi's View | 3:46 PM
Cool-headed expert voices are pushing back against the scaremongering narratives around irrational exuberance and AI excitement pushing equities into a bubble-like environment.
By Rudi Filapek-Vandyck, Editor
Have the relentless scaremongering and associated weakness in share prices of ASX-listed growth companies and AI-beneficiaries by now passed a turning point?
One thing we can report with certainty is those voices who remained loyal to the theme (turning themselves into 'contrarians') are starting to speak up. Judging from cautiously rising share prices, at least some inside the local investment community appear to be paying attention.
Strategists at LGT Wealth believe the Q3 US results season --yet again much stronger than forecast-- showcased all the ingredients to silence general anxiety about a potential repeat of the post-1999 Nasdaq meltdown.
Analysts at Morgan Stanley have been visiting clients, traveling half the globe in what must have been a grueling exercise, only to discover their stoic confidence in the AI revolution building was mostly met with scorn, doubt and lots of questions.
The one question most asked: is there an AI bubble brewing?
Morgan Stanley's response: if one defines a ' bubble' by lack of value creation underneath rising share prices, then the answer is categorically no, because there's a lot of value creation going on.
While fully acknowledging the key risk is for new development and further break-throughs to occur at slower pace than a sceptical and impatient investor community might require, Morgan Stanley's house view is for 2026 to become the year when AI starts delivering on its many promises.
Soon US companies will start reporting on efficiencies and margin increases achieved through successful AI implementation. At least, such is the anticipation, also supporting the view today's share prices are not exorbitantly high as more growth is waiting to be revealed.
The analysts are in particular excited about the pending arrival of agentic shopping assistants that will introduce shoppers to a whole new experience, with companies like Shopify preparing to take the lead on the next innovation poised to woo friend and foe.
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