By Jason Zweig

AI Yai Yai

On May 14, AIAI Holdings started trading on the Nasdaq Global Market. And, yes, the ticker symbol is AIAI. The company calls itself Ai(2) for short (pronounced "A-I-squared").

How should bubble watchers feel about this?

On the one hand, AIAI, which lost $160 million on $272 million in revenue last year, suddenly has a stock-market value exceeding $1 billion.

On the other, AIAI's stock opened way below its pre-listing "reference price" of $20. This suggests the market might be skeptical about this self-described "AI-enabled diversified holding company utilizing Transformational AI to enhance portfolio performance."

AIAI's prospectus referred repeatedly to "an expected initial listing price of $20 per share," but this was a direct listing rather than an IPO. The stock opened for trading at $12 and closed at $15.09, a first-day gain of almost 26%. (The return on direct listings is customarily calculated from the open, not the pre-listing price.) AIAI's performance so far is nowhere near as nutty as dot-com IPOs at the peak of internet mania a quarter-century ago, when first-day gains sometimes exceeded 400%.

AIAI, whose press release announcing its stock listing included the term "AI" no fewer than 20 times, says it seeks to create "an AI-powered ecosystem through acquiring and scaling companies that have high potential for increased operating results through the integration of our AI into their operations." This reminds me of CMGI and Internet Capital Group, holding companies that skyrocketed during the dot-com boom in the late 1990s and then crashed when that bubble burst. It's also the latest echo of the kooky craze of adding ".com" to company names back then, which has been repeating with companies racing to add "AI" to their names or tickers.

To me, this quirky case suggests that the market for all things AI-related is heating up, but not yet overheated. At their peak, bubbles feature IPOs of outfits with much wackier marketing pitches than a name change to something like "AI-squared." We aren't yet seeing IPOs of companies that produce AI-enabled ketchup bottles or AI-integrated underwear. But, if history is any guide, they're coming -- probably sooner rather than later.

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Catching Up

My last column, " Why It's So Hard to Spot a Stock-Market Bubble," looked at the risks of being sure you know stocks are -- or aren't! -- overvalued.

Back in 1999, I said internet stocks were a bubble. I didn't mince words. As I wrote:

In the long run, the internet stocks and the funds that buy them have no more chance of living up to their hype than Mike Tyson has of winning a Nobel Peace Prize.

That turned out to be right, but people didn't want to hear it at the time. For months, I got countless emails comparing me to nearly every organ and orifice in the human excretory and reproductive systems.

This taught me an important, if subjective, rule: A market has probably become a bubble once the fans of an asset start lashing out at skeptics.

We don't seem to be there yet.

Instead, we're still in the debating phase. Many readers are sure that stocks -- especially those related to AI -- are a bubble.

Gregory Taylor in Pennsylvania got me to laugh with his opening line:

A bubble, you ask? More of a hydrogen-filled dirigible.

Paul Kim emailed from London:

Soon enough we'll figure out all the money pouring into AI and its expectations was building a house of cards.

Bruno Freitas in Portugal wrote:

If it looks like a bubble, smells like a bubble, talks like a bubble, walks like a bubble, it's likely to be a bubble.

Yet no one seems ready to mock or insult those with the opposite view.

I liked the response from Robert Wootten, a reader in Iowa, best of all:

Looking at things from a fundamental perspective, are the prices silly? Yes. Can they get sillier? Also yes. Will the prices burst? Absolutely. When? Anybody's guess.

On another note, readers share my concern about the loss of trust in society and the financial markets. Suspicious bets, perhaps relying on insider information, keep cropping up on prediction markets. While regulators are dropping fraud cases, convicted fraudsters are obtaining pardons.

Kerry Klaassen Veale in California wrote:

I do realize that unscrupulous people are profiting enormously, and DOJ should investigate and prosecute. The inequity of fraud makes me angry when so many are struggling to buy food and gas and health insurance.

Jim Brett emailed from Illinois:

Of course, there have always been bad actors, people and businesses who have been able to get away with things. But, when that starts to become (almost) the dominant narrative, it becomes hard to convince young people that ethical behavior should be their norm. Excusing market manipulation, and even celebrating it, will not end in a good place.

My dad liked to say that trust is like fine porcelain: easy to break and hard to repair.

"Now Tell Me: What Happened to It?"

Marty Leibowitz died this month at age 89. The former investment leader at Salomon Brothers, TIAA-CREF and Morgan Stanley was a pioneer in designing bond portfolios and managing risk.

When I interviewed him decades ago, Leibowitz told me a story I've never forgotten (although I might have garbled some of the details with the passage of time). In 1969, as a young physicist, Leibowitz interviewed for a job at Salomon Brothers with Sidney Homer, the brilliant dean of the bond business. As I recall the story, Homer grilled Leibowitz, trying to stump him with math questions. Then Homer fired off the two-part question that no other job applicant had gotten right:

Think of the centurions who cast lots for Christ's robes on the day of the Crucifixion in 33 A.D. Imagine one of them received the equivalent of 10 cents and invested it at a 4% return, compounded annually. What would it be worth today (ignoring inflation and taxes)?

Leibowitz subtracted 33 from 1969 and calculated [(1.04 ^ 1936) *.1] in his head. Very quickly, he began to answer, "Ninety-four nonillion, 742 octillion..." (the result would have been approximately $94,742,509,169,229,300,000,000,000,000,000).

Homer was impressed, but cut him off with the second part of the question. Now tell me: What happened to it?

"This," Leibowitz recalled, "I could not answer right away."

Then he realized what Homer meant: Where did it go? Why aren't the centurion's descendants nonillionaires? Why is the total amount of money in the world today measured in mere trillions?

Wars, diseases, revolutions, depressions, bankruptcies, financial crises and natural disasters all swept through history and wiped out wealth. "To be able to have compound interest compound over long periods," Leibowitz told me, "is a kind of historical miracle."

In most countries, investors today have the miraculous privilege of being able to compound their wealth over long periods without facing the apocalyptic forces that have wreaked havoc throughout history. What a sad irony that so many people are choosing, instead, to act like short-term gamblers.

Question of the Week

The SEC recently proposed making it optional for public companies to file quarterly financial reports; under the proposal, firms could choose to disclose their results only twice a year.

I agree with my colleague Spencer Jakab that, in theory, this could help mitigate short-term behavior by companies and investors -- but that, in practice, results in the U.K. and elsewhere show that it might not make much of a difference.

What do you think? Would companies perform better and think longer term if the regulatory burden of quarterly financial disclosures were lifted? Or would investors be deprived of useful information if quarterly reports became optional?

You can share your thoughts at intelligentinvestor@wsj.com or, if you're reading this in your inbox, by just hitting reply. Please include your name and location. Responses may be lightly edited for brevity and clarity.

You could also tell the SEC what you think at SEC.gov.

Je Suis Désolé

The great 17th-century French painter de La Tour spelled his first name Georges. A typo in a caption in our last issue incorrectly spelled his name as George de La Tour.

Last Word

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May 19, 2026 11:00 ET (15:00 GMT)

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