Established AI‑enabled giants are unlikely to be wildly overvalued
Howard notes that companies like Microsoft, Amazon, and Google have diversified businesses and generate massive cash flows, making extreme overvaluation improbable.
Their AI divisions, while growing, represent a fraction of total earnings, providing a cushion against speculative price spikes.
The real valuation risk lies with pure‑play AI startups that lack proven revenue models.
“It's unlikely that today's prices for enormously profitable companies like Microsoft, Amazon, and Google are going to turn out to have been ruinously excessive.” — Howard Marx
While some AI firms appear over‑hyped, the memo argues that the technology’s real demand makes it unlikely to be a classic bubble. A balanced investment stance is recommended.