The hype around AI stocks might be pricing in way too much optimism. One seasoned investor just broke down why the valuations look stretched right now, and the reasoning is pretty solid if you dig into the fundamentals.

When you're looking at these rallies driven purely by narrative rather than earnings growth, it's worth questioning how sustainable it really is. The question isn't whether AI will matter—it obviously will. The real question is whether current stock prices reflect realistic expectations or just pure sentiment.

Worth a deeper look if you're considering any positions in this space.