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How far has the AI 'bubble' progressed?
Shenwan Hongyuan believes that the AI-driven technological revolution is still in its 'first half.' The Magnificent Seven (Mag7) boast a net profit margin of as high as 35% and a return on equity (ROE) of 52%, a stark contrast to the negative figures seen during the dot-com bubble. Capital expenditure forecasts for leading firms have been revised upward by 36%, reaching USD 687.7 billion, yet technical indicators have already climbed to historically elevated levels. It is premature to declare an imminent bubble burst; however, whether earnings can continue to materialize remains the true Sword of Damocles hanging over the AI bull market.