Tech stocks have been volatile, with fears of overvaluation dragging down the Nasdaq Composite Index since November. Microsoft’s 10% stock price drop despite profit growth highlights high expectations in the AI era. Investors are wary of a potential bubble burst, recalling the dot-com collapse’s 77% losses.

Nvidia’s CEO, Jensen Huang, sees AI disrupting industries with platform shifts from CPU to GPU computing and new AI applications. Agentic AI systems mark a computing frontier, driving revenue gains for hyperscalers. While valuations remain high, tech giants like Nvidia, Microsoft, and Alphabet are profitable, easing bubble fears.

The Nasdaq-100’s average P/E ratio is 32.9, down from a year ago, unlike the 60 P/E ratio during the dot-com bubble. Tech companies leading the AI revolution are profitable, with Nvidia growing profits by 65% and Alphabet topping $100 billion in revenue. Current valuations suggest a buying opportunity in a tech rally that could last for years.

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Read more at Nasdaq: Nvidia’s CEO Says There’s No AI Bubble: Here’s What the Numbers Say