July 22 - Bank of America analysts argue that leading AI names like Nvidia (NVDA, Financial), Super Micro Computer (SMCI, Financial) and Alphabet (GOOGL, Financial) are not exhibiting classic bubble behavior, despite recent rallies.
In a client note, BofA highlighted that true bubbles tend to see rising price volatility alongside gains. But over the past week, the Cboe Volatility Index has declined by about 8.5% to its lowest level of the year, and major tech shares have climbed without a corresponding jump in swings.
“Nine of the last ten bubbles showed vol‑up, spot‑up patterns, yet our mega‑caps are moving higher on easing volatility,” the bank said, noting that in Q1 2024, similar stocks saw volatility rise with price. That pattern has not reappeared in this AI‑led market.
Nvidia stock has surged more than 60% so far in 2025 on booming chip demand for generative AI. Alphabet and Super Micro have also outpaced the S&P 500. BofA cautions that bubbles can unfold over years, but current metrics “do not signal frothy conditions.”
Investors anxious about tech valuations may take comfort in cooler trading ranges. Still, the note warns, “we could be in early innings of a long‑term move,” keeping a watchful eye on volatility trends.
