Profit bubble is harder to prevent than valuation bubble; it'll be too late to sell once EPS is downgraded.

Peter Berezin from BCA Research points out that the current AI bubble is a profit bubble rather than a valuation bubble. Semiconductor valuations are still acceptable, but profit expectations are overly optimistic and unsustainable. Similar to the real estate and banking sectors before the 2008 crisis, where surface PE ratios were not high but supported by unsustainable profits, once profit realization is hindered, the bubble will burst. It is advisable to monitor AI demand indicators in advance to avoid selling only after EPS is downgraded, so as not to miss the opportunity.