Trending Now - Economist Cautions on AI Bubble Dynamics Amid Market Shifts

WHO:

Fortune - John Higgins, chief markets economist at Capital Economics

Fortune - Sarah Friar, CFO of OpenAI

Fortune - Bloomberg Intelligence

Fortune - McKinsey

WHAT:

Fortune - The AI stock bubble has already burst, according to John Higgins.

Fortune - As of fall 2025, there were 498 AI unicorns with a combined valuation of $2.7 trillion.

Fortune - OpenAI's valuation reached $730 billion in February 2026, up from $500 billion in October 2025.

Fortune - Nvidia reported a revenue of $68.1 billion for its fourth quarter, a 73% year-over-year increase.

Fortune - The price-earnings ratio for the IT sector peaked at nearly 75% in late 2024.

Fortune - The semiconductor industry has seen a recent slowdown due to high demand and geopolitical tensions.

WHERE:

Fortune - The ongoing war in Iran has impacted helium output in Qatar, which is responsible for about one-third of the world's supply used in computer chip manufacturing.

WHEN:

Fortune - The AI stock bubble was debated throughout 2025.

Fortune - The price-earnings ratio for the IT sector was noted to be the smallest since the pandemic as of October 2025.

Fortune - 100 AI unicorns were founded in 2023 or after.

Fortune - The report from John Higgins was published in March 2026.

WHY:

Fortune - Higgins expressed concern that the tech sector's inflated valuations may not be sustainable due to potential lower demand for AI.

Fortune - The “SaaSpocalypse” has led to a rapid selloff of software-as-a-service stocks, impacting valuations.

HOW:

Fortune - Higgins analyzed the ratio of current share price to earnings per share to assess the existence of a bubble.

Fortune - The report indicates that 88% of companies report regular AI use, but adoption may be stalling due to employee anxiety about job displacement.

(UPDATED March 29, 2026 23:05 UTC)

In a recent report, John Higgins, chief markets economist at Capital Economics, declared that the AI stock bubble has burst, highlighting concerns over inflated valuations in the tech sector. As of fall 2025, there were 498 AI unicorns valued at a staggering $2.7 trillion, but the ongoing war in Iran has disrupted helium output in Qatar, a key resource for computer chip manufacturing. Meanwhile, OpenAI's valuation surged to $730 billion in February 20th26, and Nvidia reported a remarkable revenue of $68.1 billion for its fourth quarter, reflecting a 73% year-over-year increase despite signs of a slowdown in the semiconductor industry.