Jeff Bezos calls AI a bubble, but at the same time the engine that will revolutionize everything: a warning or a hidden opportunity?
“AI is a bubble…but it will revolutionize every industry worldwide.” With these words, Jeff Bezos has reignited the debate in financial markets. At first glance, the statement seems contradictory: a bubble is normally synonymous with overvaluation, fragility, and the risk of collapse. But the addition that AI will revolutionize every sector radically changes the message: it’s not an alarm, it’s a warning full of opportunities and complexity. The truth is that we investors aren’t so interested in the definition. What really matters is whether this "bubble," whether positive or negative, will shrink abruptly and with what effects on portfolios.
Because, like it or not, AI stocks are now among the largest by market capitalization in global indices. Those who invest in broad-based ETFs are already exposed, often without realizing it. The question to ask, therefore, is not whether AI is overvalued. It is, and the multiples confirm this. The crucial question is whether this valuation can hold or whether there will be an inevitable "reset".
Destructive vs. Productive Bubbles
Bezos introduced a key distinction: not all bubbles are the same. There are destructive bubbles, like the 2008 subprime mortgage crisis, which produced nothing but economic and financial ruin. And there are so-called profitable bubbles, like the biotech bubble of the 1990s: a sector that underwent sharp corrections, but from which emerged technologies and drugs that today are pillars of global healthcare.
AI, according to Bezos, belongs to this second category. Even in the face of painful corrections, innovations will persist and continue to create value.
This vision is linked to a fundamental concept for investors: differentiating between market price and intrinsic value. The price can rise and fall, but long-term value remains if the fundamentals are solid.
Amazon and AI: concrete investments
After the general analysis, Bezos brought the conversation back to Amazon. This is no coincidence, given that the group is one of the world leaders in cloud infrastructure and AI-related services.
The numbers speak for themselves: Amazon expects to invest over $100 billion in capital expenditures in 2025, much of it directed towards AI and cloud infrastructure. In Europe, Amazon has announced more than $1 billion in investments in data centers, including projects in Italy. In the United States, the company is building a massive technology hub in Georgia, with a commitment of over $11 billion.
Added to this is his equity stake in Anthropic, one of the most promising startups in the field of artificial intelligence, with investments of approximately $8 billion.
For investors, this means that Bezos’s speech isn’t pure rhetoric: behind it, there’s actual capital commitments, with the clear intention of positioning itself for the next phase of the technological revolution.
The Dot-Com Parallel
Bezos then drew a parallel with the Dot-Com bubble. In the early 2000s, Amazon share price fell by more than 80%. A crash that could have spelled the end for the company. Yet, while the price plummeted, the number of customers and revenues increased.
The implicit message is clear: those with true fundamentals not only survived, but became global leaders in the years that followed. Bezos seems to suggest that AI may also be going through a similar phase. High valuations may be compressed, but the sector won’t disappear: on the contrary, it will emerge stronger, with the best players consolidated.
For investors, this means one simple thing: not all AI companies deserve the same level of trust. Some will fail, others will become future pillars, as happened with Amazon, Google, or Apple after 2000.
Valuations and Multiples: The Central Issue
Looking at market data, there are signs of overvaluation. The information technology sector currently shows trading at forward P/E multiples above their 10-year and 30-year averages. In other words, markets are already pricing in exceptional and sustained growth.
However, these multiples are underpinned by solid earnings data. According to FactSet:
- the IT sector continues to experience positive earnings surprises;
- Corporate guidance is rising;
- EPS growth estimates for 2026 exceed 20%.
It’s essential to remember, however, that these are forecasts, not obligations. Corporate guidance can change rapidly, especially in a global context characterized by geopolitical tensions, uncertain monetary policy, and higher capital costs than in the past decade.
What Bezos is really telling us
Bezos didn’t speak of an imminent collapse. He didn’t sound the alarm. He simply acknowledged that prices are high, but that behind them lies a long-term technological revolution.
Translated for investors:
- It’s fair to acknowledge that AI stocks are richly valued today;
- It’s equally true that the sector has real foundations;
- Even if a downturn comes, those with solid foundations will emerge stronger.
This reading requires a conscious approach: not getting carried away by irrational enthusiasm, but also not giving up on a sector with long-term growth prospects.
Conclusion: balancing risk and opportunity
So, how should we interpret Bezos’s words? We’re facing a situation similar to 2000: for the worse, because prices are indeed high; but also for the better, because we know that behind it lies a structural change destined to last.
For investors, the lesson is clear: avoid the idea that "this time it’s different" and that prices can only rise, analyze the fundamentals and distinguish between solid companies and speculative projects, and consider that a correction, however painful, would not erase the intrinsic value of the technology.
The risk is real, but it shouldn’t be paralyzing. AI, like the internet twenty-five years ago, is destined to change the world. The real challenge for investors is not predicting the timing of a correction, but positioning themselves on companies capable of generating lasting value beyond short-term fluctuations.
Original article published on Money.it Italy 2025-10-06 17:42:16. Original title: Bezos, AI e bolla speculativa. Cosa devono sapere (davvero) gli investitori
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