"Investor Warns: 'We Are Definitely in an AI Bubble That Will Eventually Burst'"
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Oct 21 2025
0mins
Should l Buy GOOG?
Source: TipRanks
AI Bubble Warning: Lauren Taylor Wolfe of Impactive Capital warns that the current excitement around AI is a bubble similar to the dot-com boom, predicting it will eventually burst and lead to significant investor losses.
Market Excess Example: Wolfe cites Oklo, a nuclear energy company with a $25 billion market cap and no revenues for three years, as an example of market excess, highlighting the irrationality of current valuations.
Long-term Investment Strategy: Advocating for a long-term investment approach, Wolfe suggests focusing on undervalued companies rather than chasing trends, and recommends sectors that are currently overlooked.
Wall Street Consensus on QQQ: Analysts have a Moderate Buy consensus on the Invesco QQQ Trust ETF, with a price target suggesting a 10.1% upside potential, despite concerns about the sustainability of current AI investments.
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Analyst Views on GOOG
Wall Street analysts forecast GOOG stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOG is 336.08 USD with a low forecast of 255.00 USD and a high forecast of 400.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
15 Analyst Rating
14 Buy
1 Hold
0 Sell
Strong Buy
Current: 331.330
Low
255.00
Averages
336.08
High
400.00
Current: 331.330
Low
255.00
Averages
336.08
High
400.00
About GOOG
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Microsoft Investment Increase: Thiel purchased 49,000 shares of Microsoft in Q3, elevating it to the second-largest holding at 34% of his total portfolio, reflecting his optimism about Microsoft's cloud services and AI integration, even as the company faces growth slowdowns.
- New Investment in Apple: Thiel initiated a new position in Apple by acquiring over 79,000 shares in Q3, suggesting he sees potential in Apple's AI capabilities, particularly its vast iPhone sales network and upcoming AI-powered smart glasses.
- AI Stock Selection: Although Thiel's hedge fund holds only three AI stocks, his choices of Microsoft and Apple demonstrate a preference for technology builders, indicating a belief that these companies will play a more significant role in future technological revolutions.
See More
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- Price Pressure Emerges: Amazon CEO Andy Jassy stated that consumers are beginning to feel the impact of the Trump administration's 10% tariffs on prices, particularly amid increasing economic uncertainty.
- Inventory Management Strategy: Jassy noted that Amazon and many third-party sellers proactively purchased inventory last year to mitigate tariff impacts, which helped keep prices stable for a time, but as supplies dwindle, tariff costs are starting to reflect in prices.
- Changing Consumer Behavior: Consumers are showing increased caution in their shopping habits, opting for bargains and hesitating on higher-priced discretionary items, indicating the economic environment's influence on spending behavior.
- Limited Retail Profit Margins: Jassy emphasized that the mid-single-digit operating margins in retail leave little room to absorb rising costs, stating that if costs rise by 10%, retailers have very few options to manage that pressure.
See More
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- Earnings Performance: Amazon reported Q4 earnings per share (EPS) of $1.95, slightly below the $1.97 expected by analysts, while its revenue of $213.4 billion exceeded the $211.3 billion forecast, indicating strong revenue performance despite the earnings miss.
- Capital Expenditure Forecast: Amazon's projected capital expenditures for 2026 are set at $200 billion, a significant increase from $132 billion in 2025; although this raised market concerns, CEO Andy Jassy emphasized that most of the spending will address high demand for AWS services.
- AWS Growth Momentum: AWS experienced a 24% year-over-year revenue increase in Q4, reaching an annualized revenue run rate of $142 billion, with a backlog of $244 billion, reflecting robust growth in the cloud services market and a 40% increase in backlog year-over-year.
- Advertising Revenue Surge: Amazon's advertising revenue rose 22% year-over-year to $21.3 billion in Q4, with significant contributions from sponsored product ads and Prime Video ads, further solidifying its competitive edge in the e-commerce sector.
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