IDEAS home Printed from https://ideas.repec.org/p/cwl/cwldpp/2537.html

From Innovation to Speculation: AI and the Magnificent Seven

Author

Listed:
  • Rerotlhe B. Basele

    (Macquarie University)

  • Peter C.B. Phillips

    (Yale University, University of Auckland, Singapore Management University)

  • Shuping Shi

    (Macquarie University)

Abstract

The AI boom has driven the Nasdaq and the Magnificent Seven tech stocks to record highs. But how much do these new records reflect underlying value, how much is speculation, and how vulnerable are these stocks and the wider market to a major downturn? Our evidence and analyses show clear signs of bubble exuberance in most of these stocks, concentrated in a few names like Nvidia, leading to latent risks for investors who assume their index funds are safely diversified and supported by wider economic fundamentals.

Suggested Citation

  • Rerotlhe B. Basele & Peter C.B. Phillips & Shuping Shi, 2026. "From Innovation to Speculation: AI and the Magnificent Seven," Cowles Foundation Discussion Papers 2537, Cowles Foundation for Research in Economics, Yale University.
    • Handle: RePEc:cwl:cwldpp:2537
    as

    Download full text from publisher

    File URL: https://cowles.yale.edu/sites/default/files/2026-06/d2537.pdf
    Download Restriction: no
    ---><---

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cwl:cwldpp:2537. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Brittany Ladd (email available below). General contact details of provider: https://edirc.repec.org/data/cowleus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.