'We don't view this as a bubble' that will pop soon: Wall Street weighs surging AI costs on stock market rally

June 28, 2026 - 12:07

Wall Street analysts are pushing back against fears that the booming artificial intelligence sector is a speculative bubble ready to burst. Following Micron Technology's latest earnings report, which showed strong demand for AI-related memory chips, market experts told Yahoo Finance that the current rally is built on real, sustained spending rather than hype.

"We don't view this as a bubble that will pop soon," one analyst said, pointing to the massive capital investments from cloud providers and enterprise customers. The concern that surging costs for AI infrastructure could eventually drag down stock valuations is being dismissed by many on Wall Street. Instead, they argue that the high spending is a sign of long-term commitment, not irrational exuberance.

Micron's results were seen as a key test for the AI trade. The company reported better-than-expected revenue, driven by demand for high-bandwidth memory used in data centers. This reassured investors who worried that the sector's growth might slow down. Analysts noted that while costs are rising, they are being matched by revenue growth from companies like Nvidia and Microsoft.

The broader market has been volatile lately, with some worrying that AI stocks are overpriced. But the consensus from Wall Street is that the technology is still in its early stages. As long as companies keep spending on AI chips and data centers, the rally has room to run. For now, the message is clear: the AI boom is not a passing fad.