The ECB economists warn of a correction in the stock markets fueled by the artificial intelligence boom.

The economists of the European Central Bank (ECB) emphasize that the current strong gains in the stock markets of the US and Europe, fueled by investor optimism for artificial intelligence, are concerning and could lead to a correction. They suggest that current stock valuations, although reflecting the transformative potential of artificial intelligence, are susceptible to a correction, similar to past technological revolutions.

A possible scenario is a speculative bubble, where stock prices exceed fundamental values, and the disappearance of enthusiasm could trigger a sharp decline. Additionally, even without a bubble, a correction could occur against the backdrop of increasing demand for risk premiums.

The ECB warns about the exposure of European investors to American technology companies, which could amplify the effects of a downturn. Furthermore, authorities have fewer tools to manage a potential crisis compared to the dot-com crash period, which could pose a risk to the financial stability of the euro area.