Last week I identified 21 large cap ($2B+) artificial intelligence (AI) stocks (see here and here) that jumped 26.3%, on average, in May. The question now is whether or not that jump in prices indicates that a bubble is still developing.

Of those 21 AI stocks:

12 have advanced further by an average of 5.9% since the end of May (i.e. MTD) and they are as follows, in descending order. 

1. Tesla (TSLA): UP 16.4% MTD; UP 98.4% YTD
2. Super Micro Computer (SMCI): UP 11.8% MTD; UP 218.7% YTD
3. Netflix (NFLX): UP 6.3% MTD; UP 42.4% YTD
4. Advanced Micro Devices (AMD): UP 5.7% MTD; UP 92.9% YTD
5. Taiwan Semiconductor (TSM): UP 4.3% MTD; UP 38.0% YTD
6. Marvell Technology (MRVL): UP 2.6% MTD; UP 62.0% YTD
7. NVIDIA (NVDA): UP 2.5% MTD; UP 165.3% YTD
8. Bentley Systems (BSY): UP 2.5% MTD; UP 37.0% YTD
9. Applied Materials (AMAT): UP 2.1% MTD; UP 39.8% YTD
10. Palantir Technologies (PLTR): UP 2.1% MTD; UP 134.0% YTD
11. Palo Alto Networks (PANW): UP 1.8% MTD; UP 57.0% YTD
12. Advantest Corporation (ATEYY): UP 1.7% MTD; UP 100.3% YTD

(If the outperformers, TSLA and SMCI, are removed, the category has only advanced 3.6% MTD.)

The remaining 9 AI stocks - C3.AI, SentinelOne, CloudStrike, ServiceNow, Integral Ad Science, Lam Research, Synopsys, ASML Holding and Broadcom, have declined by 2.4% MTD, on average.

Summary

In total, the 21 AI stocks above have advanced 0.7% MTD.

The Global X Artificial Intelligence and Technology ETF (AIQ) invests in 93 stocks of:

• companies operating across development and utilization of artificial intelligence technology in their products and services,
• companies that provide hardware which facilitates the use of artificial intelligence for the analysis of big data,
• information technology,
• software and services,
• software,
• system software,
• software research and
• artificial intelligence software sectors

and it has advanced 3.3% MTD after having declined 9.7% during the month of May.

Conclusion

Given the results of the above analysis, the answer to the opening question as to whether or not a bubble is still developing in the AI sector is a resounding NO. Only Tesla and Super Micro Computer seem to be in a bubble at the current time.

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