Schwab IMPACT 2025: A.I. Bubble Not Ready to Burst, But Pullback Overdue

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NDX up , medium term, interviewee explicit

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Charles Schwab 7.8
Asset Manager $890.00B
James Demmert 9.0

Schwab IMPACT 2025: A.I. Bubble Not Ready to Burst, But Pullback Overdue

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I think we do and I think it's sooner than people expect. I think 2030. So that's about five years from now. We're only two and a half years into this business cycle, this bull market. They usually last seven to nine years. So we got a long runway. Tech stocks are trading at PE multiples less than growth rates; AI cycle is early and spending is increasing rapidly; normal corrections of 10-20% are healthy and buying dips in tech is advisable. Foreign stocks also offer better valuation prospects.

11/5/2025 8:18:35 PM	short term cautious up	5 days later	+1.61%	+0.80%
11/3/2025 6:30:01 PM	short term cautious up	6 days later	+0.69%	+0.35%
11/1/2025 1:00:33 AM	short term up	7 days later	-1.39%	-1.39%
10/27/2025 5:01:01 PM	short term up	6 days later	-0.15%	-0.15%
10/23/2025 3:00:52 AM	short term cautious up	5 days later	+3.00%	+1.50%
10/8/2025 1:00:07 AM	short term cautious down	5 days later	-2.07%	+1.03%
10/1/2025 5:00:02 PM	short term up	5 days later	-0.21%	-0.21%
9/13/2025 1:29:51 AM	short term up	7 days later	+1.92%	+1.92%
8/11/2025 5:30:31 PM	short term up	6 days later	-0.53%	-0.53%

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We are live in Denver, Colorado at the Schwab Impact Conference. James Demmert is joining me now, founder Chief Investment Officer, Main Street Research. We're talking about technology and market conditions. You don't think there's a tech bubble about to burst just yet?

Nicole Petallides
James Demmert

We don't. There is a bubble inflating but it has a long way to go. We think we can hit Dow 100,000 by 2030. The bull market is only two and a half years in, typically lasts 7 to 9 years, so there's a long runway.
What about the recent pullbacks of tech stocks like Nvidia, Palantir, AMD, and Qualcomm? Are you okay with a 10% or more pullback?

Nicole Petallides
James Demmert

Yes, a pullback is overdue. The Fed probably won't cut soon, government shutdown is a headwind, and earnings beats aren't being celebrated. We see corrections of 10-20% as normal and buying the dips in key tech stocks is advised.
What about comments from Alex Karp and concerns about Palantir?

Nicole Petallides
James Demmert

Alex Karp is smart; shorts may profit but not for years. The AI cycle is early. There's an ongoing arms race in AI with companies like Meta and Google needing to outspend competitors to stay relevant.
How do you view Nvidia and Jensen Huang’s concerns about China winning the AI race?

Nicole Petallides
James Demmert

The spending in AI exceeds expectations and will continue. We need better deals on trade and tariffs with China since we do a lot of business there.
You have targets on Dow 100,000, S&P 7100 by 2026, 8100 ahead. What about tech upside?

Nicole Petallides
James Demmert

Tech stocks are trading at price to earnings multiples less than their growth rates. Buying on dips is the best strategy. Corrections of 10-20% are normal and offer opportunities.
What about foreign stocks?

Nicole Petallides
James Demmert

Valuations outside the US are about half. Foreign stocks are up 28% this year versus 14% for the S&P, and a rush toward foreign stocks is expected.
What about concerns on circular funding around OpenAI?

Nicole Petallides
James Demmert

It's not healthy; a trend similar to dot-com bubble excesses is beginning, but it is only a symptom of inflation in the bubble; a normal correction will relieve that pressure.
Other sectors interesting?

Nicole Petallides
James Demmert

We like US financials on deregulation and possible Fed rate cuts; foreign markets are broadly rising.

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