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Artificial intelligence is now one of the most powerful drivers of equity markets. But when a theme becomes both a technological revolution, an engine of growth and an object of speculation, an essential question arises: at what price is this growth already integrated into the prices? This is precisely the subject of this study. It is not a question of saying that AI-related actions are necessarily in bubble, or of challenging the depth of the economic transformation under way, but of measuring where we are in the recovery cycle.
The first objective is therefore cyclical. Through the BRJ AI Evaluation Cycle Index, the study seeks to situate the market between the phases of discount, expansion, maturity and excess. With an index currently close to 82/100, valuations are in an advanced phase of the cycle: they are high and the margin of error is reduced, without implying that a definitive peak of markets has necessarily been reached. The distinction is fundamental: a company can continue to experience excellent growth even though its action has already entered a mature phase of its valuation cycle.
The second objective is to give concrete economic significance to the many observed. To say that a company is worth 20, 40 or 67 times its turnover does not simply mean that it is « cost ». This means that today the market capitalizes several years of future growth, with very demanding implicit assumptions about income growth, margins, profitability and maintaining a competitive advantage. The study therefore translates these multiples into implicit growth rates: for example, a company valued around 67 times its sales must, according to the assumptions used, maintain growth rates that can approach 40 to 50% per year for several years to gradually reduce its multiple to more normal levels without destroying value.
The ambition of this article is to answer two simple but decisive questions for the investor: where are we in the AI valuation cycle? And what future growth do current prices already require companies? It is the combined answer to these two questions that results from the actual assessment of the yield/risk torque today.
