Wall Street shrugs off bubble fears as the S&P 500 hits record highs 11 times in May, climbing 11% this year. Tech stocks lead gains with the Nasdaq up 16%. Strong first-quarter earnings prompted Goldman Sachs and Morgan Stanley to raise their S&P targets, as investors bet AI advances will turbocharge corporate profits.

AI-related companies have posted eye-popping gains. The Philadelphia Semiconductor index has surged 81% since January, while Sandisk skyrocketed 600%. The S&P 500 now trades at 21 times expected earnings, above its 30-year average of 17. Michael Burry and Paul Tudor Jones warn the AI frenzy resembles the dotcom boom.

Bullish analysts counter that markets are underpinned by strong fundamentals. Morgan Stanley's Mike Wilson acknowledges pockets of excess but expects the market to continue higher. Goldman's Ben Snider notes conditions typical of bull market endings are absent. With major AI IPOs on the horizon, investors appear ready to buy the dip.