While artificial intelligence remains one of the most popular topics in the current market, the CEO of Alliance Bernstein, Seth Bernstein, argues that investors need to be wary of the return risks of overheating AI’s transactions. Foreign media reports state that while he highly recognizes AI ' s long-term capacity for change, he goes on to state that current market pricing has pre-empted too many optimistic expectations.

Long-term value separated from short-term pricing Look.

Bernstein, in an interview, stated that the long-term impact of AI on society could be greater than the Internet and closer to the structural changes brought about by printing. He stated that AI would change the way asset management, client services and intra-enterprise collaboration took place.

He also mentioned that he had already used AI to process research abstracts and performance evaluations in his work, and that the Investment Committee of Alliance Bernstein was using such tools to compile and analyse information more quickly. He stressed, however, that the endorsement of a technology would change the world and would not be tantamount to the acceptance that all relevant assets at the present time were worth the current price.

High valuation and increased concentration

Bernstein believes that the current performance of the AI Concept Unit is similar to that of the Internet bubble in the late 1990s. Chip companies, as well as large technology companies such as Microsoft, Amazon, Alphabet and others, have increased significantly in recent years, with some of the valuation indicators still at historical highs.

He noted that when the market was expected to be lifted at a high level, the margin of error would be significantly narrowed. Price adjustments may occur very quickly when profits are realized at a slower rate than expected or when market sentiment shifts.

  • The top 10 components of the index are about 40%.
  • US equities account for about 72% of the world index market value of MSCI
  • Most of the private-market configuration is in the United States.

Inflation remains external pressure

In addition to the valuation itself, Bernstein also mentioned that inflation could be an external shock factor in a high valuation market. The data show that, as of May, consumer prices in the United States had increased by 4.2 per cent per year, still significantly above the Federal Reserve ' s target of 2 per cent.

In his view, tariffs, continued government spending and high oil prices could continue to push inflation. In the event of repeated inflationary pressures, market expectations of interest rate paths may also be adjusted, thus reducing pricing space for high-valued assets.

Bernstein indicated that a meaningful round of market amendments had become one of the main topics of his discussions with clients. In his view, the recall was likely to occur, but it was difficult to judge the specific point of time, and the high status could also last for some time.

On the basis of that judgement, he was recommending that clients gradually allocate some of their funds to markets outside the United States. Over the past 15 years, United States asset performance has continued to be excellent, making a number of investors reluctant to decentralize, but in his view this may not continue.