Joel Litman: We Are NOT in an AI Bubble

Litman argues cleaned-up "uniform accounting" shows the S&P 500 is cheap and not in an AI bubble, while flagging Oracle and microcap defense stocks as key exceptions.

• No AI bubble in public markets: Litman argues the S&P 500 trades at a real ~20x multiple against ~20% uniform-accounting earnings growth — a PEG of 1, historically a screaming buy seen only five or six times in 30-40 years.
• GAAP understates earnings by ~50%: Litman says accounting changes (100% R&D expensing, goodwill amortization, lease rules) since the late 1980s have made reported earnings roughly half of real cash generation, meaning Shiller's CAPE of ~41-42 is really closer to 20x.

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