In a world where Tesla has stayed at "severely overvalued" stock prices for about a decade, with occasional crashes to just "overvalued", I'm not so sure the big AI companies really need returns that justify their stocks. Sam Altman and Dario Amodei are both in their own ways trying to capture that same lighting in a bottle where the company is evaluated solely on the CEO's vision

I feel like this is dot com 2.0. The dot com's valuations eventually were proven to be true, only way too early. With investing Timing is everything, if you invest in Pets.com you lost, if you invested in chewy.com you won. If you invested in Broadcast.com you lost, if you invested in YouTube.com you won.

AI is going to transform things but these current prices are crazy.

Yeah. This is the whole “market can stay irrational longer than you can stay solvent” thing. I think there’s almost always a plausible bearish case to be made. Hence: permabears.

For how long can the gamble be detached from real life?

It's an honest question. In the real world, resources and people are finite. Things have to make sense, the bills have to be paid.

In the stock market however, a company can be completely worthless in the real life, but if the money blobs all agree to pumo money into it the stock price goes up anyway.

In 2022, Tesla had a P/E of 34 and a growth rate of 50%.

The problem is, the last two decades were marked by extremely low, zero and sometimes outright negative interest rates plus a ton of outright printed money that got blown up the arses of the big banks. Worldwide.

That money sought returns and found them in hypergrowth of increasingly dumber nonsense. First it was Meta (or back then, just Facebook), then Tesla, then during Covid cryptocurrencies and NFTs, and now it's AI... but now, there seems nothing to be the "next big thing" to sink money into when the old thing dies down in growth and expectation and matures. Maybe gambling, but that's not sustainable, the number of whales/marks to make money from is finite.

IMHO, we're headed for a very big worldwide correction to deflate the markets and hand back a lot of the money to the central banks where it can be taken out of circulation, and it will be an event larger than the dotcom bust plus 2007ff combined. But, unfortunately, the markets can stay irrational longer than a good short-seller can stay solvent...