Collective madness, bubble, cul-de-sac, the terms have flourished to describe the rise in AI values. The market eventually entered a rapid consolidation phase, but one sector exploded. A healthy correction, some would say, but the beginning of a crash, others insist. Some explain. Even the stars get tangled up. Phew…
The lack of economic indicators due to the shutdown also added uncertainty to the market. However, many experts continue to insist that this AI revolution will boost the economy by boosting business productivity.
Artificial intelligence models have never been so powerful. Innovation is making headway, but perhaps the market will suffer from an indigestion of infrastructure built too quickly.
But there was a bubble in quantum software and hardware stocks, which quietly lost 50% in one month (IONQ, Quantum Computing, Rigetti…).
Over the decades, technology has always changed the economy. In a world with little growth, we have to look for it where it is. It is mainly in the technology sector that it exists, and more particularly today in AI, which promises to become a place of hypergrowth. Historically, growth has been more robust in technology stocks.
For 30 years, technology has structurally outperformed the equity market: +12% annualised return compared with +8% for global equities, despite the bursting of the internet bubble.
So bubble or no bubble?
Of course, on the stock market, the valuations of tech stocks are much higher. This high price is justified by much more robust and constant growth.
The earnings momentum is even phenomenal for the Magnificent Seven, which are growing by 29% a year, three times faster than the rest of the SP&500. And the future remains bright, according to AI experts.
Other figures: since 2009, earnings per share of tech companies have multiplied by 6 to 7 times, compared with 2 to 2.5 times for non-tech stocks, explains Christophe Pouchoy, manager of the Echiquier Artificial Intelligence fund, share K, , which has gained 18.68% over one year and 122.11% over the last three years. [1]
Faced with claims of a bubble, others explain that the AI boom is underestimated.
We are at the beginning of a decade that will be marked by the advent of a new technological era,” Nvidia CEO Jensen Huang told Bloomberg: “We are entering a virtuous circle: more and more companies and individuals are using AI. The more they are used, the more profit they generate and the more investment in research that will further improve AI.”
The world is underestimating just how big artificial intelligence is going to become, Cristiano Amon, CEO of Qualcomm Inc, told Bloomberg Tech.
Generative algorithms are the latest development and offer undreamt-of possibilities. And Apple believes in the potential of generative AI: “Patience, AI will eventually boost our sales,” Tim Cook’s message to investors and analysts.
NVIDIA CEO expects AI to transform $100 trillion industries worldwide:
“Think about it: the IT industry has remained largely unchanged for 60 years, and now, with AI and faster computing, every layer of the IT stack is changing. All the computers we use, representing a trillion dollars or more, must now be transferred to the new IT platform”.
Artificial intelligence is less and less about the future and more and more about the present.
The robotaxis are about to arrive and an army of humanoids is about to invade.
“Humanoid robots will be the greatest products ever created,” Elon Musk told the US – Saudi Investment Forum.
But the idea of a bubble, born of the uninterrupted rise in the Nasdaq, continues to haunt the markets, with the internet bubble still fresh in their minds.
Enguerrand Artaz, Strategist, La Financière de l’Échiquier in his Macroscope, cites a representative difference: “Microsoft is now trading at 30 times expected one-year earnings, compared with over 60 times in 1999
Since many crises have arisen from excessive debt, Christophe Pouchoy highlights this other major difference: “The telecoms sector, at the centre of the Internet revolution, had to take on huge debts. Today, this net debt is much lower for the major AI players (25% of operating income for the 11 largest hyperscalers compared with 192% in 2000 [2] for the main telecoms operators [3]). Another aspect that confirms the difficulty of establishing a parallel with the internet bubble is profitability, which was low or even zero in 1999, unlike today. The current configuration is therefore different, and we need to take account ofthe persistent acceleration in the growth of technology companies relative to the rest of the economy economy
The PEG barometer.
And the manager expands on his opinion: “The rise in the sector is justified by profit growth. Tech stocks are valued at 27 times earnings on the Nasdaq [4]. This may seem high, but let’s not forget that these valuations reflect growth prospects that are well above the market. To better assess this valuation, we recommend using PEG (Price Earning Growth), a measure that enables us to estimate the value of a stock by taking growth into account. At 1.7 times today [5], PEG is in line with its historical average
And growth remains solid, according to Christophe Pouchoy. After a strong year with rising demand for cloud infrastructure, this growth is set to continue in 2026, with an estimated increase of between 20% and 30%. If it slows down, its pace remains steady. And the hyperscaleers (Amazon, Microsoft, Google…) have the financial resources to support this trend, and demand for computing power remains higher than current supply.
According to statistics from early 2025, only 1% of data is analysed. Thanks to AI, this hidden value can be released, with a massive impact.
The manager of the Echiquier Artificial Intelligence fund qualifies: “However, these data centres consume a lot of energy. Securing energy supplies can put the brakes on business. And the lifespan of semiconductor chips is estimated at 7 to 10 years, so there is less risk of obsolescence. While the risk of recession may emerge, it is so far unlikely
And AI will continue to expand. Once the AI infrastructure has been built, the second phase will focus on application, with the development of concrete data processing models (AI agents). Digital solutions, software, are part of the development of this second phase to synthesise, manipulate and process this data.
The art of anticipation
Focused on innovation and the identification of megatrends, the fund managers are keeping pace with changes in the AI ecosystem. Portfolios need to be constantly adapted,” explains Christophe Pouchoy: “It is important to be able to estimate the speed of implementation of these innovations, by identifying the different waves. You need to have a good understanding of how a technology evolves in order to identify companies and position yourself in advance, at the right time. When this growth begins, when the market identifies it and starts to take it on board, that’s the time to take profits, as soon as the share price reflects this growth
LFDE’s Technologies division also manages Echiquier Space K share (+28.27% over one year and +146.48% over three years) [6] and Echiquier Robotics share K (+11.59% over one year and +70.10% over three years). [7]
Astrology contradicts the notion of a bubble
As the year draws to a close, it’s time for astrological forecasts for those who believe in them. According to the astrologers , the downturn at the beginning of November is due to… an opposition from Mars to Uranus (November 4). Uranus represents technology stocks in particular.
A lovely trio of planets is forming an isosceles triangle which will be perfect in 2026 and rule out any crash. Uranus, Neptune and Pluto, with the added help of Saturn, herald major economic and social progress. This is a good reason to be optimistic about the stock market, explains Jean-François Richard, a specialist in astrological analysis of the stock market who predicted the crash of 2000.
[1] Performance at 19.11.2025 Cumulative performance vs. benchmark : Since inception : 68.88 compared to 56.18% for its benchmark index MSCI WORLD NET TOTAL RETURN | 3 years : 122.11% compared with 50.43% for its 1-year index : 18.68% vs. 5.97% for its index | YTD 15.61% vs. 4.40% for its index
[2] Bloomberg, Barclays Research, LSEG, Data & Analytics
[3] Telco operators : AT&T, Verizon, Level 3, Lucent, Global Crossing, Worldcom and Qwest
[4] Bloomberg at 21/11/25 for the Nasdaq Composite
[5] Source: Goldman Sachs at 08/10/2025
[6] Performance to 19.11.2025. Cumulative performance vs. benchmark : Since inception : 165.15% compared to 127.01% for its benchmark index MSCI ACWI NET RETURN | 3 years : 146.48% compared with 49.23% for its 1-year index : 28.27% vs 7.02% for its index | YTD 18.51% vs 5.53% for its index
[7] Performance to 19.11.2025. Cumulative performance vs. benchmark : Since inception : 255.74% compared to 198.53% for its benchmark index MSCI WORLD NET TOTAL RETURN | 3 years : 70.10% compared with 50.43% for its 1-year index : 11.59% vs. 5.97% for its index | YTD 8.13% vs. 4.40% for its index
