Overview

• The Bank of England’s Financial Stability Report cautioned that equity prices—especially for AI-focused tech—look stretched and that heavy index concentration heightens the risk of a sharp correction if optimism fades.
• Officials highlighted material bottlenecks to AI progress, including power, data, and supply-chain constraints, which could undermine expected returns and reprice valuations.
• Goldman Sachs argued the market is not in a bubble yet, citing strong profits and balance sheets at dominant tech firms, while warning that valuations are becoming stretched and urging diversification.
• Global equities continued to climb as investors bought the AI theme, with the S&P 500 and Nasdaq setting record highs and Asian markets advancing on rising earnings estimates for major tech names.
• Large, rapid financings kept flowing into AI—such as Elon Musk’s xAI raising about $20 billion with reports of up to $2 billion from Nvidia—prompting scrutiny of circular vendor-style deals, even as Goldman CEO David Solomon predicted a future reset and Jason Furman noted AI investment drove most U.S. growth in early 2025.