Back in 1996, Federal Reserve Chair Alan Greenspan famously said:

"How do we know when irrational exuberance has unduly escalated asset values, which then become subject to unexpected and prolonged contractions?"

It was a prophetic question, as the stock market soon after became caught up in the mania of the DotCom bubble, reaching unprecedented levels of overvaluation followed by a precipitous price correction. The Nasdaq didn't return to its 2000 highs until 15 years later.

Many are feeling like it's deja vu all over again with the latest run-up in the small number of stocks, colloquially known as the Magnificent 7, driving the market indices to new record highs.

Are we in a new era of irrational exuberance, this time driven by the promise of artificial intelligence?

And if so, what's the danger this time of another prolonged contraction ensuing?

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