Whether it's a bubble depends on pricing. Is it worth the price, is it worth the future price, and by how much?

In the case of AI coding, yes: AI does exceptionally well at search (something we have known for quite some time, and have a variety of ML solutions for).

Large codebases have search and understanding as top problems. Your ability to make horizontal changes degrades as teams scale. Most stability, performance, quality, etc., changes are are horizontal.

Ironically, I think it's possible that AI's effectiveness at broad search give software engineers additional effectiveness, by being their eyes. Yes, I still review every claude code PR I submit, and yes, I typically take longer to create a claude code PR than a manual one. But I can be more satisfied that the parallel async search agents and massive grep commands are searching more locations, more quickly, and more thoroughly than I would.

Yes, it probably is a bubble (overvalued). No, that doesn't mean it's going to go away. The market is simply overcorrecting as it determines how to price it. Which--net net, is a positive effect, as it encourages economic growth within a developing sector.

Bubble is also not the most important concern--it's rather a concern that the bubble is in the one industry that's not in the red. More important to worry about are other economic conditions outside of AI and tech, which are causing general instability and uncertainty rather than investor appetite. Market recalibrating on a developing industry is fine, as long as it's not your only export.