Analyst Warns of Potential Overvaluation in Silicon-Based Upstream Sector

Deep News13:30

Drawing parallels to the dot-com bubble of 2000 reveals that current metrics such as US market capitalization to GDP ratio and the proportion of AI capital expenditure to GDP have already surpassed levels seen during that period. The core of the previous bubble was hardware infrastructure stocks like Cisco and Nortel, while today, semiconductor companies such as Nvidia similarly occupy the pinnacle of market valuation. Historical evidence suggests that after a bubble bursts, hardware companies may never return to their previous highs; the entities that truly grow are often downstream applications, like Amazon. "One should not get intoxicated by this bull market; buying hardware stocks at peak prices may lead to being locked in for a long time without recovery," stated Chen Guo, Deputy Director and Chief Strategist of the Research Institute at East Money Securities, during an appearance on the SINA Securities live broadcast.

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