Excess Returns · Thursday, September 3, 2026
Dan Niles, founder of Niles Investment Management, believes we are in an AI revolution that will reshape the world. However, he cautions that this could lead to over-investment and a significant pullback in semiconductor stocks, potentially in the range of 30% to 50%. He notes that current valuations are not as extreme as during the dot-com bubble.
“If you believe that AI is one of those revolutions that's going to reshape the landscape of the world, then by definition, you're going to have a lot of people chasing that opportunity because they know if they're the last company left, they're going to make anordinate amount of money.”
“And so, if you believe that AI is one of those technologies, which I do, and I think most people do, then by definition, you have over-investment going on.”
“And that's why I'm hopeful that any meltdown in semiconductors, which are sort of the tip of this AI sphere, will be, you know, limited to 30 to 50%.”