The transformation of the economy is proceeding, but at a slower pace than we were led to expect. It has been a wild summer for artificial-intelligence stocks. Beijing's flaunting of China's AI progress, among other factors, sent American stocks sliding last week. The week before saw a selloff of AI stocks, with Nvidia, Micron and others hit hard. The pessimists were quick to warn that the AI bubble was bursting.

Doomsayers are always on hand, waiting for every hiccup on Wall Street or data center setback to proclaim the technology is about to pop. Yet the underlying investment thesis remains intact: AI infrastructure buildout continues, enterprise adoption is accelerating, and hyperscalers maintain capital expenditure commitments. Market volatility reflects recalibration of timelines, not fundamental thesis breakdown.

History suggests technological revolutions advance in fits and starts. The dot-com era saw multiple corrections before sustained growth emerged. Current AI valuations, while elevated, are grounded in measurable revenue streams unlike the speculative excesses of 2000. Investors should distinguish between froth in specific names and the secular trajectory of AI diffusion across the economy.