AI is everywhere now; not a day goes by without at least one company releasing an AI related news announcement, the latest being Volkswagen who are integrating ChatGPT into their next generation of cars.

These AI announcements are usually accompanied by a spike in the company’s stock price and this, together with the recent rise in the tech and broader market, has prompted some market commentators to declare that we are in an AI fueled stock market bubble.

Are we in a bubble?

Unfortunately, we will only know if and when the bubble bursts; by its very definition we cannot know if we are in a bubble but let’s crunch some numbers to investigate further.

We’ll use Excel Price Feed to get some financial data into Excel, and we’ll start by looking at the “Magnificent Seven”.

What are the Magnificent Seven? Well, these are the largest, most significant players in the global tech industry, and are leading the charge in bringing AI to the masses:

• Apple
• Microsoft
• Alphabet
• Amazon
• Nvidia
• Meta
• Tesla

We’ll start with market capitalization, and use the Excel Price Feed formula EPF.Yahoo.MarketCap together with a nice stacked chart to see how they stack up (excuse the pun), units are $trillion:

The total market capitalization of these 7 companies is almost $12 trillion, but how does this compare to the market in general, say the S&P500?

Here we have added the rest of the S&P500 ($27 trillion) and can see that the Magnificent Seven account for more than one quarter of the entire market:

What is even more astounding is how these 7 stack up against entire stock exchanges.

Here we are comparing them with the 3 largest non-US exchanges: Shanghai, Euronext and Japan:

Now let’s see how they have grown over the last 12 months.

We’ll use the EPF.Yahoo.Historic.Close formula to retrieve the stock price at the start of 2023 and compare it to the current stock price using EPF.Yahoo.Price

They’ve all increased by at least 50%, with Nvidia, perhaps the most AI centric stock being the star performer.

So, are we in a bubble?

Why not download Excel Price Feed today and crunch some numbers yourself. You can also download the spreadsheet created for this post from our website to get started.