The sky-high valuations seen in tech stocks due to the promise of artificial intelligence aren't so "extreme" when looking at prior innovation cycles.
"The relative forward-P/Es of today's AI leadership are still a far cry from what was seen at the peaks of past innovation waves," said managing partner Michael Goldstein in a Tuesday note."
In fact, they sit close to the level reached a year before the tops."
For AI, he examined holdings within the Roundhill Generative AI and Technology ETF (CHAT) , which includes Nvidia, Microsoft , Alphabet , Baidu and more.
While valuations for these stocks appear "rooted in reality," Goldstein noted that a correction isn't out of the question.
Persons:
Michael Goldstein, Goldstein, — CNBC's Michael Bloom
Organizations:
Empirical Research Partners, Nvidia, Technology, Microsoft, Baidu