This is a link post.

There's a stock market bubble currently in progress. The key question is: which stocks are unsustainably high?

There are a few ways that the current AI boom could turn out to be a mistake (as in AI stocks dropping much below current levels; I'm not commenting here on whether AI will kill us all).

Regulations outlaw most new AI development on safety grounds.
Financial markets decide that frontier AI companies won't make much profit (my counter-argument).
Military action in Taiwan might cause an AI winter where lack of new GPUs slows progress dramatically for a couple of years.

I'm betting that if any of those causes happen, they're more than two years away, and that the resulting crash will leave AI stocks above current levels.

Note that that I don't take seriously any claims that AI is approaching technical limits. If AI hit a wall in 2025, it was bad news for the wall.

The most likely alternative to AI being in a bubble is that some large stocks in slow-growing industries are in a bubble. Not a stereotypical bubble, but a bubble that overconfidently predicts [...]

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First published:
December 21st, 2025

Source:
https://www.lesswrong.com/posts/RDqRTwz5Qnum4LtNT/what-s-the-current-stock-market-bubble

Linkpost URL:
https://bayesianinvestor.com/blog/index.php/2025/12/21/whats-the-current-stock-market-bubble/

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Narrated by TYPE III AUDIO.

[Linkpost] “What’s the Current Stock Market Bubble?” by PeterMcCluskey

LessWrong (30+ Karma)