Artificial Intelligence at the crossroads of valuations: between promise and reality

Records are piling up in the technology markets. Within just a few days, Apple passed the USD 4 trillion mark in market capitalisation, Nvidia exceeded USD 5 trillion, and OpenAI – the company behind ChatGPT – is preparing for an IPO that could value it at USD 1 trillion as early as 2026. This frenzy illustrates the power of the narrative surrounding artificial intelligence – but also the questions it raises.

Spectacular, yet tangible growth

For Daniel Steck, Fund Analyst and Manager at Piguet Galland, this surge is not without foundation – at least for certain companies:

“Nvidia’s parabolic share price trajectory simply mirrors that of its revenues, which have increased thirteenfold over five years, driven by explosive demand in data centres and the race for computing power.”

With revenue growth still expected to reach +60% in 2026, the market appears willing to accept the high valuation of the chipmaker, a symbol of the boom in infrastructure essential to AI.

OpenAI: a promise yet to be realised

By contrast, OpenAI represents more of a hope than an established economic reality.

“This valuation is more problematic, as the company is still not profitable and its revenues remain modest, at around USD 13 billion,” notes Daniel Steck.

Even though Microsoft recently confirmed an implied valuation close to USD 500 billion by taking a 27% stake, profitability has yet to be demonstrated. The company will need to prove its ability to monetise its innovations beyond the success of ChatGPT.

A bubble in the making? Not yet

Comparisons with the dot-com bubble of 2000 are frequent. But according to Daniel Steck, today’s situation is different:

“The profits generated by AI are very real for companies involved in building the infrastructure and benefiting from massive investments in the sector.”

In other words, the economic foundation of this technological revolution is far stronger than that of the early-2000s speculation. The real uncertainties now lie in the speed and scale of monetising today’s massive investments.

Full article (french only)

Artificial intelligence: speculative bubble or lasting revolution?

On the same topic, read Daniel Steck’s interview on Forum (RTS)