AI-fueled gains in U.S. technology stocks have pushed valuations toward dot-com-era extremes, and ECB researchers said a correction is likely even if artificial intelligence eventually boosts productivity and profits. The blog said the S&P 500's CAPE ratio is nearing historical peaks and argued that tech booms often evolve from firm-specific optimism into economy-wide risk, leaving investors vulnerable when sentiment turns. For Europe, the concern centers on roughly €440 billion of euro-area household exposure to the Magnificent Seven, much of it held through funds and ETFs, where fund redemptions in a downturn could force selling and deepen contagion. The ECB has also said pension funds and insurers hold nearly a similar amount, raising the risk of portfolio losses, weaker consumption, tighter financing conditions and broader financial stability stress. The post, which the authors said does not represent formal ECB policy, followed Vice President Luis de Guindos's warning in May 2026 that correction risk was "quite elevated" and argued policymakers have less room than in the dot-com era to soften the fallout.