AI stocks haven’t played by the normal valuation rules. Now that rates are higher, they may have to, says UBS

UBS suggests that AI-driven stocks have long enjoyed valuation exceptions due to the boom in investment and profits, but with rising interest rates, they may now face more conventional valuation scrutiny. Michel Lerner highlights that past surges in tech investment have often been unsustainable. This shift could indicate a more challenging environment for these companies, impacting investor confidence and potentially leading to more conservative growth expectations.