Concerns about an AI market bubble continue to circulate as major technology names extend their gains, but one strategist argues the sector’s momentum is being widely misunderstood. He says investor sentiment has become overly focused on stock chart trajectories rather than on the broader business cycle and changing expectations around AI adoption.
BNN Bloomberg spoke with Matt Kacur, president of FSA Valuation Service, who said recent swings in sentiment reflect natural adjustments as companies navigate early-stage AI investment. He added that isolated examples of hype don’t signal a wider problem and noted that opportunities remain across several sectors despite uneven market confidence.
Key Takeaways
- Strong revenue and EBITDA growth at companies such as Nvidia, Alphabet and Taiwan Semiconductor support current AI valuations and counter bubble warnings.
- Metrics at traditional consumer names like Hershey and Nike show weaker fundamentals despite comparable or higher multiples, strengthening the case against an AI bubble.
- Oracle’s sharp post-earnings surge and fast reversal illustrate a single-stock hype cycle, not widespread excess across the AI sector.
- Gold producers remain attractive as valuations look reasonable and companies can rise even if bullion simply holds current levels.
- Select health-care and industrial stocks tied to infrastructure and grid upgrades present opportunities, while consumer stocks require caution amid weaker sentiment.
Read the full transcript below:
ANDREW: Investors have been worried about a potential artificial intelligence bubble, with many stocks in the sector running up tremendously this year. However, our next guest is not in the bubble camp. We’re joined by Matt Kacur, president of FSA Valuation Service. Matt, great to see you. Thank you very much for joining us.
MATT: Hey Andy, thanks for having me.
ANDREW: With the massive spending on data centres and AI equipment — tens, even hundreds of billions of dollars planned over the next few years — you’re not worried companies are overdoing it?
MATT: Well, it depends on which companies you’re looking at. The hardware guys like Nvidia and TSM — Taiwan Semi — they’re the ones spending the money, right? I don’t feel they’re in a bubble at the moment. They’re making a lot of money. For example, Nvidia just released its quarter not long ago: 62.5 per cent revenue growth and 61 per cent EBITDA growth, and it’s trading at 34 times. That doesn’t sound like a bubble to me.
Now, you do see some weakness in the software companies because maybe they’re the ones spending the money and getting nervous they’ll overspend. But overall, I just don’t see a bubble. I see more warranted values. I know if you look at the stock charts, they look pretty scary — on a three-year basis Nvidia is up quite a bit — but the fundamentals support it. That’s where I’m at.
ANDREW: What about Google? It’s been in vogue among investors. For now, anyway, their search business isn’t being annihilated by AI. Is that a stock you’d buy right now?
MATT: Oh yeah, we love Google. Similar numbers — not quite as much growth, but 15.9 per cent revenue growth last quarter, 15.7 per cent EBITDA growth, trading at 19 times. I don’t think search is a big problem for them. They also have an opportunity in AI with their own products, and that only enhances their search. It’s a remarkable company. I wouldn’t back off that one at all, despite the huge run-up. I don’t see it as expensive, and I see AI as an opportunity for Alphabet.
ANDREW: There is some evidence emerging that productivity gains from AI will be slower than hoped. Some companies are even pushing back at Microsoft about paying for AI tools. It’s very early days — we’re in the Paleolithic era of AI — but is there a risk expectations are overdone and profits won’t get the big lift people hope for?
MATT: I think that’s fair to consider, and it’s possible. We can’t grow at these kinds of rates forever, even with this type of innovation. But it’s not a bubble. It’s just a normal cycle. Maybe you can’t get the revenue you thought you would, or maybe you spend a little more than investors would like. That’s just normal business cycles. So I stay away from the word bubble. Sure, maybe a pullback, maybe a bit overextended — a less harsh word than bubble.
ANDREW: What about Oracle? That stock soared and then fell. Would you be a buyer now?
MATT: Yeah, that’s an example where if I saw more stories like it, I might be in the bubble camp. CEO Larry Ellison came out — nothing against him or Oracle, it’s a good company with a tremendous opportunity — but the rhetoric was really overhyped.
Oracle’s stock was up 42 per cent that day, to US$345. He projected 77 per cent revenue growth in 2026 and revenue reaching US$144 billion in four years. For perspective, let me read the past few years: 2022, US$42 billion; 2023, US$49 billion; 2024, US$52 billion; and 2025, US$57 billion. So around eight per cent average growth. And now we’re supposed to believe, just because of AI, it will go to US$144 billion in four years? The stock jumped 42 per cent on the day. That’s the kind of bubbly talk I’d worry about.
If we saw more stories like that — that’s one isolated incident — then maybe. But I’m not seeing that across the board. Oracle is a good company; I just think the stock got ahead of itself after the rhetoric.
ANDREW: We’re tight for time. You’re bullish on gold, and Aura Minerals is a name that’s caught your eye. What’s the attraction?
MATT: We’re mostly a financial modelling shop, so we don’t go deep into mineral deposits. But we see tremendous return on capital improving quarter after quarter — stair-stepping up — and the value looks to be there. I think the multiple is around 10 or 12 times EV/EBITDA — our preferred metric; we don’t use P/E.
I think gold overall is bullish. People are still buying gold over U.S. Treasuries. I still think there’s runway. Gold can stay at this level and companies can still move up. The stocks can rise even if gold doesn’t.
ANDREW: OK. I don’t know if we have the chart right now for Aura Minerals, but it’s AUGO in U.S. trading. Thank you very much indeed for joining us, Matt.
MATT: Anytime.
ANDREW: Matt Kacur, president of FSA Valuation Service.
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This BNN Bloomberg summary and transcript of the Dec. 5, 2025 interview with Matt Kacur are published with the assistance of AI. Original research, interview questions and added context was created by BNN Bloomberg journalists. An editor also reviewed this material before it was published to ensure its accuracy and adherence with BNN Bloomberg editorial policies and standards.
