AI-related stock market bubble "much less likely" according to Yardeni Research, as tech giants' high valuations recalibrate. The S&P 500 Information Technology sector's forward price-to-earnings ratio dropped to 23.7 from over 30.0 last year, signaling cooling investor enthusiasm for AI-driven speculation. Magnificent 7 companies—once dominant in AI hype—are facing scrutiny over sustainability of earnings growth amid massive capital expenditures on AI infrastructure. Analysts note a global portfolio rebalancing, with investors shifting from overvalued U.S. tech to lower-multiple international markets, reducing bubble risks. Forward P/E declines and capital expenditure concerns suggest market participants are pricing in slower AI revenue translation timelines.