AI stocks haven’t played by the normal valuation rules. Now that rates are higher, they may have to, says UBS

What happened: UBS commentary says AI stocks have not followed normal valuation rules and may have to now that rates are higher. Michel Lerner noted that past surges in investment and the profitability they produced proved unsustainable for U.S. tech companies. Why it matters: The remarks suggest higher rates could push AI stocks toward conventional valuation standards, with prior tech investment and profitability surges cited as unsustainable.

UBS commentary says AI stocks have not followed normal valuation rules and may have to now that rates are higher. Michel Lerner noted that past surges in investment and the profitability they produced proved unsustainable for U.S. tech companies.

The remarks suggest higher rates could push AI stocks toward conventional valuation standards, with prior tech investment and profitability surges cited as unsustainable.