Comment by muzani

The way people tend to invest is compare it to a different number. I remember one point where FB was valued around $100 per user or so. The IPO flopped when people thought it was too high, but it turned out far too low. Netflix, Amazon, etc, had a similar situation too. Logically it was overinvested, but they broke the records.

People were cautious after dot com. Then they got greedy with FAANG. Even greedier with crypto. Crypto proved that markets didn't really matter.

AI actually has some basis, but some of it is being measured to crypto standards. Not to mention it was already overinvested 10 years ago when everyone was calling it "machine learning", and yet the numbers kept going up.

Sometimes prices are just high though. Bubbles happen when someone is trying to sell it to another sucker, who's trying to sell it to another sucker. We don't see a lot of "sucker" language going around with AI yet. When it happens, people will advertise it as a great investment, like they did with NFT and real estate near the bubbles.