ECB Governing Council member Fabio Panetta warned that technology companies' overly optimistic valuations could make the market prone to a sharp correction. The governor of the Bank of Italy said in his speech on Monday that current asset prices reflect the market's optimistic expectations about the future profitability of artificial intelligence. This type of valuation helps technology companies to finance and continue to invest more, but once expectations fall short, the market is prone to a sharp correction. Recent fluctuations in technology stocks are an example.

ECB Governing Council member Fabio Panetta warned that technology companies' overly optimistic valuations could make the market prone to a sharp correction. The governor of the Bank of Italy said in his speech on Monday that current asset prices reflect the market's optimistic expectations about the future profitability of artificial intelligence. This type of valuation helps technology companies to finance and continue to invest more, but once expectations fall short, the market is prone to a sharp correction. Recent fluctuations in technology stocks are an example.