AI sector now checks all the classic bubble signs, says Rockefeller International's Ruchir Sharma

• Geopolitical events rarely have a lasting impact on markets, with typical declines lasting about a month before recovery.
• The world economy is less dependent on energy and has effectively navigated oil supply shocks by finding alternative routes and curbing demand.
• The AI sector currently displays 'classic bubble signs' including over-investment, over-leverage, over-ownership, and over-trading.
• Bubbles are typically ended by higher interest rates, and the AI bubble will likely continue to inflate until the U.S. 10-year Treasury yield breaches 5%.

Ruchir Sharma believes the market has correctly ignored geopolitical headlines, focusing instead on the AI buildout, which he identifies as the primary driver of stock returns. He states that the AI sector exhibits 'classic bubble signs' and that this bubble will continue to inflate until the 10-year Treasury yield reaches 5%, at which point the problems for the AI bubble will become clear.