Lombard Odier director argues AI investments do not constitute a bubble

Michael Strobaek, Investment Director at Lombard Odier, argues that the current surge in artificial intelligence investment does not constitute a speculative bubble. He suggests that AI technology is being implemented more rapidly and consistently than the internet was during the dot-com era, as it is actively replacing skilled labor. Strobaek notes that current valuations for semiconductor and emerging market technology stocks are not excessively high following recent market corrections.

In contrast to speculative hype, traditional investment principles such as value investing remain relevant. Following the methodology of Benjamin Graham, investors are encouraged to distinguish between price and intrinsic value. Graham’s approach emphasizes the ‘margin of safety’—the difference between a stock's market price and its intrinsic value—to protect capital from market volatility and avoid the pitfalls of buying into growth bubbles based on euphoria rather than business substance.