Is the "AI Boom" already over? Tech Valuations Back to Pre-AI Boom Levels

[usonian]

Last edited Sun Apr 12, 2026, 07:13 PM - Edit history (1)

Check this out.

https://www.apollo.com/wealth/the-daily-spark/tech-valuations-back-to-pre-ai-boom-levels

The chart below compares the forward P/E ratios for the S&P 500 and the S&P 500 Information Technology sector.

Tech valuations have compressed from 40x to 20x, and we are back at levels last seen before the AI boom began.



That is all!

Higher resolution PDF (136Kb) of that chart:


https://www.apollo.com/content/dam/apolloaem/pdf/daily-spark/2026/apr/11/dailyspark-2026-04-11-1775830796.pdf

Edit to add: I see a lot of projects on github that are essentially LLM's on home hardware (especially Apple Silicon). I suspect that the "downsizing" of simpler tasks and the innovations coming out of China that are more efficient, will drive some of the mania down. Just how much? Will there be a "winner take all" in the enterprise space? Are there too many competitors all trying to create vertical moats? If so, what's their real value outside of their core business? Who knows?

Companies like Microsoft and Google are savaging their core business in order to become THE AI COMPANY (and yikes, nothing else!)

[bucolic_frolic]

1. There is so much AI there's going to be little else.

No one knows which AI companies will succeed. Companies are spending hundreds of billions on AI, with uncertain payoff. It has Tech Wreck potential just like 2001. It's a bug of our competitive capitalism. There were more than 600 companies making tractors after WWI, how many survived? Remember all the personal computer companies in the 1990s? Boom and bust.

[Shermann]

2. All these AI agents are getting aggregated together

Tools like Cursor let you choose the agent most adept at completing the coding task at hand. So, all these AI companies will get bought up and their technology absorbed.

[bucolic_frolic]

5. The Large Language Models are fungible?

There are differences in the hardware. Some have faster chips, some faster memory. This is like trying to put a Chevy engine in a Toyota. If none of them are profitable, and have bet the farm on AI, how will they pay for acquisitions? Bankruptcy court sounds plausible.

[BootinUp]

3. Its going to go lower. nt

[Midnight Writer]

4. I don't think it is just the AI boom that is over. I think all sectors will suffer from this President and his war.

The businessmen tycoons who run this country don't seem to realize that increasing prices, eliminating jobs, destroying our economic safety nets, and taking away health insurance subsidies kills the Goose That Lays the Golden Eggs for them.

[Bluetus]

6. And for many applications, you don't need a massive data center flying in outer space

because we can't get enough cooling here on Earth. Many AI apps run just fine on a desktop computer and don't require ANY connection to the cloud.

Yes, there are certain exotic applications that do require that mind-boggling stuff, but that is not the norm, and I guess some people are starting to figure that out now.

For example, here is a list of dozens of FREE open source LLMs you can download today.
https://github.com/eugeneyan/open-llms

[pansypoo53219]

7. i was seeing tulips.