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Controversy swirls over whether AI is a bubble — and whether the excitement about its potential is overblown and will one day peter out.
But many people don’t know that they are already using AI — and they’re using it quite a bit. If more people knew what AI does, how it does it and what changes it has brought, they wouldn’t believe it’s a boom/bust industry.
According to a recent study by Gallup Newsletters and Telescope, 99% of Americans have used a product that uses AI as part of its operation, but only 64% of those people realized that AI was involved.
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Stanford University’s HAI Institute, in its latest Index Report, states, “AI is poised to be the most transformative technology of the 21st century.”
The Index Report points out that AI is growing rapidly, and in the year 2023, the number of AI-enabled medical devices approved by the FDA was 223. This was up from only six approved in 2015.
Another rapidly growing AI technology: Self-driving cars, which offer service to a large and rapidly growing customer base. As of 2024, Waymo reported it was operating more than 150,000 weekly autonomous rides.
Private U.S. AI investment has also grown, hitting $109.1 billion in 2024 — far more than any other country. The next-highest country was China, at $9.3 billion.
What the experts say
Tech executives and experts expect AI to continue flourishing. In a recent Nvidia blog post, it was noted that, during the keynote address at a company event, CEO Jensen Huang highlighted the rise of AI companies such as OpenAI and Anthropic. “This last year, it just skyrocketed,” Huang said, pointing to the $150 billion that was invested in venture startups.
He added that demand for Nvidia GPUs (graphics processing units) is “off the charts” and that he believes “computing demand has increased by one million times over the last few years.”
Tim Bajarin, a prominent tech consultant and a principal at market research firm Creative Strategies, also doesn’t think AI is a bubble. He told me in an interview that he thinks now is a good time for AI. “We only know about an eighth of what it can do,” he said.
“Many companies are (already) using intelligence to answer questions from their customers,” he pointed out, “like, ‘Where’s my order?’ or ‘When will it be shipped?'” A search engine, he said, can answer questions like that quickly and cost effectively.
While acknowledging that many people worry that AI will increase unemployment, Bajarin notes that AI could also create jobs. “Some jobs can be automated. We’re already seeing that. Salesforce laid off 4,000 customer service people because talent was not being used.”
He recommends that workers learn to use AI tools and strive to be part of AI’s development.
All that said, AI’s future results might end up being in the middle of present expectations — not as miraculous as some think, nor as bogus as others believe.
We know that AI is helpful for personal use and is used in important industries like healthcare, transportation, entertainment and finance.
Companies are investing real dollars in AI, making its growth more certain. Investors could consider investing in the sector. Many tech companies are tied to AI, and their stocks could trade with the sector’s growth.
Some investment choices to consider
Nvidia (NVDA) continues to look interesting, even after climbing over 1,300% in the past five years. Morningstar shows good earnings growth, and with its current PEG ratio of 0.50 on March 15, its market price is quite reasonable.
A package approach could be a good choice for investors wanting to spread the risk, and some small-cap stocks offer value. Using the iShares Russell 2000 ETF (IWM) as an example, small-cap stocks have been outperforming the S&P 500 year to date as of March 15, 2026.
The Invesco S&P SmallCap Information Technology ETF (PSCT) includes stocks of companies that supply information technology products and services. Over the past year, as well as year to date, PSCT has outperformed the S&P 500 index, as of March 15, 2026.
Morningstar shows PSCT with a PEG ratio of 1.20 based on future earnings. This is a reasonable ratio. PSCT showed a loss of $1.29 per share in past earnings.
Another interesting ETF is the Roundhill Generative AI & Technology ETF (CHAT). CHAT holds the stocks of global companies, including emerging markets, that are involved in AI. The ETF is invested in large-caps, and its largest holdings include Alphabet (GOOGL), Nvidia, Samsung Electronics, Microsoft (MSFT) and SK Hynix, an emerging markets technology company. (Note: My clients hold NVDA, and I hold CHAT.)
CHAT has outperformed the S&P 500 index in both the past six months and the past five years, as of March 19, 2026. It also seems reasonably valued. Morningstar’s PEG ratio is 1.04. Note that Morningstar estimates that future long-term earnings could be down about 30% from past historical earnings. Based on the lower estimates, however, the PEG ratio would be a reasonable 0.71.
Where we are
So, where does this leave us on the “AI bubble” question? The controversy over whether a bubble exists seems to miss the fact that most of us are already using AI daily, often without realizing it.
We’re at only the beginning of learning AI’s potential, and we’re seeing massive investment and rapid growth across major industries like healthcare, transportation and finance. So while the future may not be as miraculous as some predict, nor as bogus as others fear, the data confirms that companies are investing real dollars, making AI’s continued growth more certain.
