AI Boom or Bubble? The Bigger Risk Is Concentration, Not Collapse

Amundi’s latest working paper compares today’s AI rally with the dot-com era and concludes that current market dynamics resemble a powerful thematic cycle—but not yet a classic speculative bubble. 

• AI-linked stocks delivered 267.3% cumulative returns (2023–2025) and drove roughly 50% of S&P 500 gains, echoing late-1990s concentration patterns.
• Unlike the dot-com boom, AI valuations have compressed rather than exploded, with earnings growth outpacing share-price gains.
• AI exposure peaked at 38.2% of the S&P 500, concentrated in roughly 45 names—highlighting index concentration risk.
• Amundi argues the key danger is drawdown amplification from crowding, not an imminent bubble pop.

Is AI overvalued—or simply dominant? The report suggests concentration may matter more than valuation headlines.