"At the Fortune Global Forum in Riyadh on Monday, Mary Callahan Erdoes, CEO of JPMorgan's asset and wealth management business, argued some AI stocks have "a little too much concentration." But that doesn't detract from the potential of AI technology itself, she said. "Everyone says: 'Is there an AI bubble?' That's like saying: 'Is there a computer bubble?' That's a crazy question.""
"She explained: "AI has not even been deployed anywhere to the extent that it will be. Less than 10% of companies actually say that it's embedded in the services and the products that they deliver today. There's an enormous amount of opportunity." "That's why you're seeing the multiples are the way they are," Callahan Erdoes added. "And the question is, How fast will we grow into those multiples? It's not that the multiples are wrong, they will eventually be right;""
Investor excitement for AI has increased, but concerns persist about valuation excesses and potential portfolio and economic risk if returns fall short. The S&P 500's P/E ratio sits at 31.50, drawing scrutiny from bearish analysts. Some AI stocks exhibit concentrated ownership and lofty multiples. AI deployment remains limited, with less than 10% of companies reporting embedding AI into products and services. Full adoption across S&P 500 firms could yield up to $920 billion in annual net benefit and raise market capitalization by $13–16 trillion, implying 24–29% growth from current levels. The critical issue is how rapidly companies can grow into current multiples.
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