AI Boom Not a Bubble, Says Alger Funds CEO Dan Chung

UPDATE: Alger Funds CEO Dan Chung has just confirmed that the current surge in artificial intelligence (AI) stocks is not a bubble, contrary to rising concerns. Speaking in an exclusive interview, Chung, who oversees $33 billion in assets, emphasized that this market has substantial room for growth, drawing comparisons to the dot-com boom of the late 1990s.

Chung, who experienced the dot-com bubble firsthand as a senior tech analyst, noted that while many investors are cautious, the fundamentals of today’s leading AI companies are far stronger than those during the internet boom. “We are in the middle stages of the boom,” he stated, urging investors not to miss the opportunity ahead.

This latest commentary comes as AI-related stocks experience unprecedented momentum. The Alger 35 ETF, which Chung co-manages, has surged 51.83% in the past year, significantly outperforming the 22.87% gain of the Morningstar US Large-Mid Broad Growth Index.

Chung pointed to key indicators that differentiate the current market from the dot-com bubble. He stated, “The fastest growers—stocks associated with AI—have had a ton of momentum in the last nine months. It hasn’t reached 1998-99 levels yet.” He believes that the current climate offers investors a unique chance to capitalize on AI technologies, which have penetrated various sectors.

In his analysis, Chung highlighted the robust fundamentals of companies like Nvidia, Microsoft, and Amazon, which have seen significant revenue growth and cash flow. He stated that these companies are investing heavily in AI, with projections indicating that the market for AI tech could reach between $2 trillion and $3 trillion by 2031.

As Chung elaborated, “Nvidia’s fundamentals are extremely strong,” with projected revenue growth nearing 50% this year. He advised against selling Nvidia stocks, citing their continued potential for growth.

Furthermore, Chung introduced Nebius, an emerging leader in AI data centers, predicting a staggering growth trajectory. “Nebius is growing 400% this year and another 400% next year,” he revealed, suggesting that it could transition to EBITDA-positive by next year.

Chung’s insights are critical as investors grapple with the implications of AI technologies on the economy. He cautioned against short-term thinking, urging stakeholders to focus on long-term growth potential.

With global markets increasingly influenced by technological advancements, the conversation around AI’s role is more relevant than ever. Investors and analysts alike are closely monitoring developments in this space, as Chung’s optimistic outlook challenges prevailing skepticism.

As the AI landscape continues to evolve, Chung’s insights offer a compelling narrative for those looking to navigate these turbulent waters. “We still have at least 1998 and 1999 to go through,” he stressed, as he encouraged investors to recognize the opportunities presented by AI technologies.

For those seeking to stay ahead in this rapidly changing market, Chung’s advice and stock picks present a timely call to action. The conversation around the future of AI continues to gain momentum, with implications that could reshape industries and investment strategies alike.

Stay tuned for more updates on this developing story as the AI market unfolds.