Wharton professor Jeremy Siegel doesn't see the mania around AI stocks as a bubble - and says it's impossible to predict where they'll peak

• The mania around AI stocks isn't a bubble, Wharton professor Jeremy Siegel told CNBC.
• While these tech stocks may be overvalued long term, no one can predict where they'll peak, he said.

Wharton professor Jeremy Siegel doesn't see the mania around AI stocks as a bubble — and said it's impossible to predict where these mega-cap tech stocks will peak.

"Long term I would say that they were probably slightly overvalued. But for the short term, we know momentum can carry stocks far higher than their fundamental value and no one can predict how high they might go," Siegel told CNBC on Monday.

He contrasted current AI boom with the dot-com bubble of the 1990s where there were "tremendous valuations from companies that had no earnings." He added that chip-maker Nvidia, whose recent earnings he described as "blowout," was a "real, good company."

"That's a double push," Siegel said. "As we all know, the top eight or nine companies have accounted for all of the gain of the S&P 500 this year, the other 490 have been flat or down."

The S&P 500 is up nearly 10% year-to-date, propelled by stellar gains in the likes of Meta Platforms and Nvidia, each of which has jumped over 115%. Microsoft, Apple, Amazon and Alphabet advanced over 39% each.

Siegel added that he thinks the S&P 500 could come out a winner from the banking turmoil that unfolded over the past few months because these mega-cap stocks have credit availability. The banking sector was rocked by the failure of Silicon Valley Bank in March, which sparked a series of collapses that has made banks less willing to lend.

"The problem is, if the credit conditions slow the whole economy, then there's going to be a slowdown in spending that can affect everybody — even though they have credit availability and liquidity in those stocks," Siegel added.