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Equity prices capitalize future earnings before those earnings exist.
That is the basic mechanism through which technology enthusiasm becomes financial risk: investors collect the gain first, and the underlying business has to catch up.
A European Central Bank analysis has applied that logic to artificial intelligence, warning that the setup is "worrisome" and that history suggests valuations will fall even when the original optimism was well-founded.
What the warning actually says The ECB economists are making an argument that is narrower than it first appears. They are not simply contending that AI stocks are overpriced relative to fundamentals.
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