FX.co ★ BofA: extreme rally on Wall Street forming bubble in stock prices

Chief investment strategist at Bank of America Global Research Michael Hartnett predicted that another bubble has been brewing up in the US stock market. He thinks that the bubble is being propelled by speculative activity that will entail a late-stage blow-off. Bloomberg analysts also said that the S&P 500 has performed beyond expectations. The index seen as the barometer of the stock market’s health has been developing a dazzling rally for 17 weeks since late 2023. Nvidia stock has been soaring amid the AI boom. The chipmaker nowadays controls over 80% of the AI chip market. Meanwhile, the crypto market has clicked into gear on the back of Bitcoin’s bullish run. The flagship crypto topped the $70,000 landmark on March 8 for the first time in history. Remarkably, all these records are driven by the AI hype and progress in technology.

Nevertheless, Wall Street analysts are divided into two camps. Some of them take the ongoing rally in the stock market with a pinch of salt and insist that high-tech stocks are overheated. The other camp says that the stock market is now at the initial stage of the bullish trend and current market quotes look like bargain prices. Making such forecasts, optimistic analysts refer to the last high-tech boom.

To sum up, investors have to revise their portfolios, bearing in mind the polar opposite forecasts of Wall Street gurus. Interestingly, some of them have spotted a harbinger of a looming financial apocalypse, whereas their opponents reckon that the high-tech sector is firmly on the way to prosperity. Which forecast will come true? Time will tell.