AI: a Good Investment or a Bubble?

Abstract

Artificial Intelligence (AI) has considerable potential benefits for the companies that develop and implement it, but it may also contribute to the formation of a speculative bubble in financial markets. This study examines the performance of a portfolio of AI-related stocks during the period 2020-2024, with a focus on its return and risk.

The investment in AI stocks has demonstrated relatively strong performance, with the risk-return ratio outperforming that of major market indices. Despite concerns about a potential AI bubble, no such phenomenon has been observed – while AI stock prices have experienced corrections, there have been no episodes of explosive growth followed by collapse.