The AI Bubble Is Popping

Joseph Carlson After Hours•Oct 8, 2026

Summary

Joseph examines the historical accuracy of market bears Ray Dalio and Michael Burry, concluding that following Joseph's analysis of their warnings reveals significant underperformance for investors. Joseph highlights that despite their fame from predicting the 2008 crash, both individuals have repeatedly missed massive bull market runs over the last 15 years by maintaining overly pessimistic stances. Joseph emphasizes that the US economy is exceptionally resilient and that attempting to time credit cycles or market bubbles is generally a losing strategy compared to a consistent dollar-cost averaging approach in the S&P 500.

Joseph defends current technology valuations, arguing that the market is not in a bubble similar to the year 2000 because major companies remain highly profitable and trade at reasonable multiples. Joseph notes that even if a 20-30% correction occurs, it represents a natural market cycle and a buying opportunity rather than a reason to exit the market. Joseph also briefly mentions a recent interview with Steve Eisman, where Joseph defended a bullish stance on AI technology and discussed the strategy of major tech players.

Alphabet (Google): Joseph points out that Google trades at a price-to-earnings ratio of 24, which Joseph considers a conservative valuation for such a profitable company. Joseph argues that even in a market downturn, the valuation is unlikely to collapse to extreme lows given Google's massive cash flow. Joseph maintains a long-term positive outlook on Google despite macro warnings from other famous investors.

Meta Platforms: Joseph highlights Meta as a high-quality company trading at a relatively low forward price-to-earnings ratio of 22. Joseph suggests that this valuation does not reflect the speculative mania seen during actual market bubbles like the dot-com era. Joseph views Meta as a fundamentally strong business that will continue to be a core part of a profitable portfolio.

Microsoft: Joseph mentions that Microsoft is trading at a historically low forward price-to-earnings ratio of 25, which provides a margin of safety for long-term investors. Joseph argues that Microsoft, along with other big tech firms, is among the most profitable companies in history and generates enormous amounts of cash. Joseph believes Microsoft is well-positioned to weather any potential volatility in the AI sector.

Amazon: Joseph identifies Amazon as another example of a robust company with a reasonable valuation, currently trading at a price-to-earnings ratio of 25. Joseph states that Amazon’s ability to generate cash makes Amazon a secure long-term investment regardless of short-term market fluctuations. Joseph uses Amazon to illustrate that the current market environment is driven by profitability rather than empty speculation.

Mentioned Stocks

AMZN

Sentiment: BUYAction: RECOMMENDED

Reasoning: Joseph cites a P/E of 25 and emphasizes the company's massive cash generation as a reason for long-term confidence. Joseph uses Amazon as an example of a profitable company that justifies its current price.

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