Retail Surge Fuels AI Stock Bubble, Warns McKinsey's Tim Koller

• McKinsey's Tim Koller warns AI stocks show bubble-like traits, driven by a surge in retail investor buying and speculative excess.
• Koller notes retail ownership in "Magnificent Seven" stocks is double the typical company, a historical indicator of market overheating.
• He emphasizes that long-term value stems from revenue growth and return on capital, but current AI prices are fueled by excitement, not fundamental cash flow expectations.
• Koller cautions retail investors often overlook paying a reasonable price for a company, leading to momentum-driven overshoots in valuation.
• He asserts that valuation rules for AI haven't changed; companies must be assessed individually based on future cash flows, not just thematic potential.

Why It Matters: AI stock rally shows bubble traits, risking investor losses, expert warns.