Everyone’s talking about the AI bubble. Some people are terrified, others are pretending it doesn’t exist. But here’s the thing — bubbles aren’t just about fear. They’re also about opportunity. I’ve been diving deep into this topic, and I want to share my take on how you can actually profit from the AI boom instead of running scared.
Check out the full breakdown in this video:
Is AI Really a Bubble?
Let’s get this out of the way first. Yes, there are bubble-like dynamics in AI right now. Even Sam Altman, the CEO of OpenAI, acknowledged in 2025 that an AI bubble is ongoing. According to the Wall Street Journal, AI-related investment now accounts for roughly half of US GDP growth. That’s a staggering concentration of capital in a single sector.
But here’s where it gets interesting. Unlike the dot-com era, today’s AI leaders are actually profitable. The S&P 500 Information Technology Index trades at around 30x forward earnings — elevated, sure, but nowhere near the 55x multiple we saw at the peak of the dot-com bubble. These companies have real revenues, proven business models, and massive cash flows. That’s a fundamentally different situation from pets.com burning through investor money with zero path to profitability.
The Dot-Com Comparison Doesn’t Fully Apply
People love comparing AI to the dot-com bubble, and I get it. The hype feels similar. But BlackRock’s analysis points out that today’s tech leaders combine strong profitability, disciplined capital allocation, and self-funded growth. That creates a much more resilient foundation than what we saw in the late 1990s.
The big hyperscalers — Microsoft, Google, Meta, Amazon — are pouring hundreds of billions into AI infrastructure. OpenAI alone is committed to investing $300 billion in computing power with Oracle over the next five years. That’s $60 billion per year. These numbers are mind-blowing, but they’re backed by actual revenue streams from cloud services, advertising, and enterprise AI tools.
That said, there are legitimate concerns. As GMO’s research highlights, the round-tripping of investment among the biggest AI players is reminiscent of the circular financing we saw during the internet bubble. Meta stretched its server depreciation from 3 years in 2020 to 5.5 years in 2025. Google and Microsoft went from 3 to 6 years. That’s a way to make the books look better while spending more.
How to Actually Profit From This
So how do you position yourself? Here’s my framework for thinking about it:
1. Don’t bet against the trend — ride it smartly. The AI transformation is real even if valuations get ahead of themselves. Companies building AI infrastructure — chips, data centers, cloud platforms — are generating real revenue today. NVIDIA, for example, isn’t a speculative play. It’s printing money. The key is not to chase the most hyped names at peak valuations, but to look for companies with strong fundamentals that benefit from AI spending.
2. Diversify across the AI value chain. Don’t just buy the obvious names. Think about the picks-and-shovels plays: semiconductor equipment makers, energy companies powering data centers, cooling technology firms, and enterprise software companies integrating AI into their products. The AI boom needs infrastructure, and infrastructure providers often have more predictable revenue streams.
3. Have an exit strategy. As A Wealth of Common Sense puts it, going all-in on AI stocks works gloriously until it doesn’t. You need to know when you’d take profits. Set targets, rebalance periodically, and don’t let FOMO drive your decisions.
4. Consider hedged approaches. If you’re nervous about a correction, you don’t have to go to cash. Look at balanced strategies that give you AI exposure while managing downside risk. Some ETFs are specifically designed to capture AI-driven growth while maintaining diversification across sectors.
The AI Agents Revolution Is Just Starting
One area I’m particularly excited about is AI agents. We’re moving beyond simple chatbots into autonomous systems that can actually do work — book flights, write code, manage portfolios, run customer service operations. This is where the next wave of value creation is happening. Companies building AI agent platforms and the infrastructure to support them are positioned for massive growth.
The AI model landscape is also evolving rapidly. We’ve gone from GPT-4 being the only game in town to a competitive market with Claude, Gemini, Llama, Mistral, and dozens of specialized models. This competition is driving costs down and capabilities up, which means AI adoption is accelerating across every industry. More adoption means more revenue for the entire ecosystem.
The Bottom Line
Look, I’m not going to tell you there’s zero risk here. There absolutely is. Late in 2025, just five companies made up 30% of the S&P 500 and 20% of the MSCI World index. That kind of concentration is historically unusual and creates systemic risk if sentiment shifts.
But the opportunity is equally real. AI is driving genuine productivity gains, creating new markets, and reshaping entire industries. The smart move isn’t to fear the bubble — it’s to understand it, position yourself thoughtfully, and take profits along the way. The people who made the most money during the dot-com era weren’t the ones who avoided tech entirely. They were the ones who invested wisely and knew when to take chips off the table.
Stay informed, stay diversified, and don’t let fear keep you on the sidelines while the biggest technological shift of our lifetime plays out.
Michael Gu
Michael Gu, Creator of Boxmining, stared in the Blockchain space as a Bitcoin miner in 2012. Something he immediately noticed was that accurate information is hard to come by in this space. He started Boxmining in 2017 mainly as a passion project, to educate people on digital assets and share his experiences. Being based in Asia, Michael also found a huge discrepancy between digital asset trends and knowledge gap in the West and China.