From Oracle to Broadcom, the Concerns About Artificial Intelligence Stocks Are Starting to Pile Up

Key Points

• Artificial intelligence stocks now trade at high valuations.

• The large AI players are investing tens of billions, if not hundreds of billions, into AI infrastructure, such as data centers.

• Investors are starting to question the return on investment.

• 10 stocks we like better than Oracle ›

Concerns about artificial intelligence (AI) stocks and their monster valuations aren’t exactly new, but the market is now being less coy about it. Following a big multiyear run for the sector, it appears that some investors are setting a high bar for AI stocks. No longer are announcements about higher capital expenditures for AI infrastructure build-out purely driving stocks higher, as investors start to question the sustainability of it all. From Oracle (NYSE: ORCL) to Broadcom (NASDAQ: AVGO), the concerns about AI stocks are starting to pile up.

The returns seem less achievable than perhaps they once were

Concerns over AI stocks have been mounting,…