Alphabet, Amazon Seen Weathering AI Bust as Shiller P/E Hits 42
Updated
Updated · Yahoo Finance · Aug 15
Alphabet, Amazon Seen Weathering AI Bust as Shiller P/E Hits 42
3 articles · Updated · Yahoo Finance · Aug 15
Summary
Shiller P/E at 42—its highest since the dot-com era—has revived fears that AI stocks could face a similar bust, prompting a search for more resilient names.
Alphabet stands out because its stock trades at about 17 times earnings even as it lifts 2026 capex to $195 billion-$205 billion from $91 billion in 2025.
More than $242 billion in liquidity and $186 billion in trailing operating cash flow give Alphabet room to fund AI spending, despite free cash flow slipping to $53 billion from $67 billion and debt topping $98 billion.
Amazon is also viewed as better placed to endure a downturn after surviving a post-dot-com collapse of more than 90%, backed now by roughly $123 billion in liquidity and a recent record of $38 billion in annual free cash flow.
The broader takeaway is that timing an AI correction is difficult, so rotating into cash-rich, lower-valuation tech leaders may offer a middle ground between chasing the boom and exiting the market.
Are circular financing schemes artificially inflating AI chip demand, and what happens to Nvidia's stock when this fragile funding loop finally breaks?
With $1.65 trillion in hidden AI liabilities looming, could Big Tech's massive off-balance-sheet debt trigger the next catastrophic market crash?