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The former BCA Research strategist argues investors are asking the wrong question about AI market froth
Dhaval Joshi, the former Chief Strategist for the Counterpoint strategy at BCA Research, posted on LinkedIn on August 3 that AI is not a single bubble waiting to pop. Instead, he described it as “a rolling SEQUENCE OF BUBBLES,” where capital fleeing one deflating sector simply inflates the next one in line.
The rolling bubble thesis #
Joshi’s framing is deceptively simple. Rather than asking whether AI is a bubble, he argues the better question is: which AI bubble is popping today?
When one AI-adjacent sector, say certain software names, starts to deflate, the money doesn’t vanish into thin air. It migrates into the next promising corner of the ecosystem, whether that’s semiconductors, silver, or another beneficiary of the buildout. The result is that no single collapse is catastrophic enough to trigger a broad market selloff, because the air is always finding a new balloon.
A track record of skepticism #
Back in July 2023, Joshi cautioned that AI hype would not automatically translate into massive profits for the leading tech companies, drawing explicit parallels to the 1990s technology bubble.
Joshi served as Chief Strategist at BCA Research from April 2021 through July 2026, during which he founded the Counterpoint strategy. The strategy’s premise was to generate investment insights independent of the business cycle. From June through August 2026, Joshi has maintained a consistently skeptical posture on AI-driven equity gains, questioning whether the capital expenditure pouring into AI infrastructure will generate adequate returns over a reasonable time horizon.
What the rolling bubble means for markets #
The broader question Joshi is circling is whether aggregate AI capital expenditure will eventually generate returns sufficient to justify the investment. The 1990s internet buildout created enormous long-term economic value, but the companies that funded the infrastructure largely didn’t capture that value. The fiber optic cables that bankrupted their original owners still carry the internet today, just for the benefit of entirely different shareholders.
The risk of a recession adds another variable. If economic conditions deteriorate, the capital flowing between AI sub-sectors could slow or reverse entirely. A rolling sequence of bubbles requires a steady stream of optimism and liquidity to keep the rotation going.
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