Asia’s inexpensive AI stocks should worry American investors
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Finance & economics | ButtonwoodAsia’s inexpensive AI stocks should worry American investorsTech mania looks very different in Japan, South Korea and TaiwanShareIllustration: Satoshi Kambayashi Dec 10th 2025|4 min readIn America, as markets surge despite fears of an artificial-intelligence bubble, one fact looms large: stocks are very expensive. That is true not just for AI darlings such as Nvidia and Microsoft but for the broader market. Consider a popular long-term valuation measure, the cyclically adjusted price-earnings (CAPE) ratio, which benchmarks companies’ stock prices against the long-term trend in their profits. On that measure the S&P 500 index of large American firms has only ever been so expensive at the peak of the dotcom mania. Already have an account?Log in Continue with a free trial Get full access to our independent journalism for free Get started Or create a free account to unlock just this article Create account Explore moreShareReuse this contentThe Economist TodayHandpicked stories, in your inboxA daily newsletter with the best of our journalismSign upYes, I agree to receive exclusive content, offers and updates to products and services from The Economist Group. I can change these preferences at any time.More from Finance & economics Free exchange Germany has a lawyer problemIts endless bureaucratic rules trap would-be reformersWhat a stiff drink says about China’s economyThe baijiu business is the latest to be struck by “involution”America’s bond market is quiet—almost too quietScott Bessent has a cunning planWall Street is drooling over bank mergersThe world’s most fragmented financial industry faces dramatic changeWhich economy did best in 2025?Our annual ranking returns Free exchangeAI misinformation may have paradoxical consequencesTo understand why, consider the side-blotched lizard