The possibility that we are currently in an AI bubble is real. As with previous hypes, the valuation of AI companies seems to be ahead of their actual profitability. Moreover, the S&P 500 is heavily overconcentrated in a handful of large tech players that are benefiting from the AI hype. Should these fall, the entire index will be pulled down with them.

That risk is compounded by the fact that the S&P has become historically expensive, with P/E ratios well above average. The risks are clear: if promised growth fails to materialize, valuations could collapse hard. The situation is reminiscent of the dot.com bubble of the early 2000s, but with an important difference: now, a lot of credit is being borrowed to finance AI growth. That makes a blow more dangerous, because debt puts extra pressure in a downturn.

Conclusion: AI could change the world permanently, but current valuations seem fragile. A bubble need not mean AI disappears, it does mean investors should prepare for sharp corrections.

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$MDB (+1,24%)

MongoDB raises outlook and shares rise

MongoDB $MDB (+1,24%) recently raised its outlook for the full year to an optimistic level and at the same time expanded its share buyback program. This caused the company's shares to rise by more than 16% in pre-market trading on Thursday. Particularly impressive is the 26% sales growth in the last quarter for the flagship product Atlas, which accounts for the majority of net sales. In addition, the company recorded its highest number of new customers in six years. At a time when both established companies and start-ups are trying to modernize their software and develop new AI applications, this increase is particularly remarkable.

Prior to the quarterly figures, the share price had fallen by 14% year-on-year, but it has risen by an impressive 42% since the low point at the beginning of April. This has been supported by a strong rebound in AI software stocks and general trading optimism. Investors should now keep an eye on key resistance areas at $253, $298 and $355, with crucial support at around $212.

Technical analysis shows bullish trend

MongoDB shares formed a pattern between March and June that is reminiscent of inverse head and shoulders formations and points to a possible bullish reversal. The right shoulder pattern found support just above the 50-day moving average, while the relative strength index (RSI) confirmed a strengthening of the price momentum. A key resistance area is the $253 level, a breach of which could propel the stock towards $298, where selling pressure is expected on the chart.

US jobless claims rise to 8-month high

In the US, applications for unemployment benefits rose to their highest level in eight months last week, but remain historically low. According to the Department of Labor, there was an increase of 8,000 to a total of 247,000 new claims for the week ending May 31, while analysts had only expected 237,000. Despite the uncertainties surrounding the potential impact of tariffs on the economy, the number of applications remains at a historically healthy level of between 200,000 and 250,000.

Numerous companies have lowered their sales and profit forecasts for 2025 when publishing their latest quarterly figures or have not issued any forecasts at all. These developments are often linked to President Trump's unpredictable tariff announcements. Last week, the government also reported an unexpected increase in job openings, while other data points to declining optimism about the labor market.

The Labor Department's comprehensive monthly employment report will be released on Friday. Analysts expect an increase of just 130,000 jobs in May, a decline from 177,000 in April. Estimates suggest that the US economy contracted at an annualized rate of 0.2% in the first quarter of 2025, a slight improvement from the initial estimate.

Sources:

https://finance.yahoo.com/news/watch-mongodb-price-levels-stock-123557980.html

https://finance.yahoo.com/news/number-americans-filing-jobless-benefits-124506421.html

$MDB (+1,24%)

MongoDB Inc. exceeds analysts' estimates of USD 0.66 with earnings per share of USD 1.00 in the first quarter. Revenue of USD 549 million exceeds expectations of USD 528.07 million.

On the watch list for almost a year and used the price weakness to buy.

- Monday: $GTLB (-0,12%) , $OKTA (+1,27%) .

- Tuesday: $CRWD (+4,14%) , $FLTR (-0,35%) , $ONON (-0,27%) , $TGT (+0,51%) , $SE-ED .

- Wednesday: $MDB (+1,24%) , $MRVL (-0,07%) , $VEEV (+1,5%) , $ZS (+3,15%) .

- Thursday: $AVGO (+2,3%) , $COST (-0,49%) , $HCP , $HPE (+0,6%) , $27C , $JD. (-0,87%)