AI stock valuations have corrected from peak levels, but economist John Higgins warns a rarer bubble is still inflating in another valuation metric.

Capital Economics' John Higgins identified that the price-earnings ratio for AI stocks has already collapsed from its peak levels

Despite the P/E ratio correction, another valuation metric remains dangerously elevated and continues to grow

The economist characterizes the remaining bubble as 'rare,' suggesting an unusual or atypical market dynamic at play

This pattern indicates selective risk remains in the AI sector even as some overvaluation has been corrected