AI: a Good Investment or a Bubble?

Dimitar Rafailov ()
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Dimitar Rafailov: Department of Finance, University of Economics - Varna, Bulgaria

Financial Navigator Journal (selected edition), 2025, issue 1, 69-78

Abstract: Artificial Intelligence (AI) has considerable potential benefits for the companies that develop and implement it, but it may also contribute to the formation of a speculative bubble in financial markets. This study examines the performance of a portfolio of AI-related stocks during the period 2020-2024, with a focus on its return and risk. The investment in AI stocks has demonstrated relatively strong performance, with the risk-return ratio outperforming that of major market indices. Despite concerns about a potential AI bubble, no such phenomenon has been observed -while AI stock prices have experienced corrections, there have been no episodes of explosive growth followed by collapse.

Keywords: Artificial Intelligence; Investment Performance; Market Bubble (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:vrn:cfinrd:y:2025:i:1:p:69-78

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