Does AI bubbles have a stock market?

This week, the stock market increased again, the new all-time reached high. Nevertheless, the benefits in financial markets were operated by a handful of companies focused on artificial intelligence.

Tech giants such as meta and Nvidia have seen their values, while investors stop breathing for openi, anthropic and perplexity to go publicly.

But for all enthusiasm, some investors are worried. They say that we have come down from this road first. And they are pointing to the dot-com bubbles in the 1990s, when tech companies touched the price only to see the bubble burst in early 2000.

“The difference between the IT bubbles in the 1990s and the AI bubble today is that the top 10 companies in the S&P 500 are more overwelled than the 1990s today.” Pay attention to their websiteA general measure of whether the stock of a company can be overwelled, citing the price-to-cum ratio of companies.

In other words, they say, this time the burst bubble could be worse that it was. And he is saying something.

The market today had many similarities in the dot-com bubbles in the 1990s. A new technology was offering a possible game-changing way of trading, and everyone wanted a piece of it.

When the bubble burst

Many of today’s largest companies were established in those newborn days of the Internet. Companies like Apple, Amazon and Microsoft were the main pillars for the then new wave of technology companies.

But the other giants of the day failed and the bubbles were erased. Companies like Pets.com, Booo.com and Worldcom raised hundreds of million dollars and collapsed.

From 1995 to March 2000, the Nasdaq Index rose 80 percent. Then the bubble exploded. As of October 2002, NASDAQ recorded a decline of 78 percent from its peak, erasing all the benefits made during the bubble.

Today, it is not difficult to find similarities in markets. Investors come to a place that they do not fully understand, before the use-case application of the underlying technology is established.

The real economy is struggling to find its feet between all the upheaval and uncertainty associated with Trump’s trade war, again, again tariff.

The increase in jobs has slowed down and the US economy has shrunk in the first three months of the year.

Some of America’s largest companies have been surrounded by tariff costs. GM says Tariff recorded a decline of $ 1.1 billion in profits. Ford posted its first quarterly loss in the years.

And still stocks are still at high levels all the time and have a clear understanding of FOMO (fear of disappearance).

Wall Street Trader Tom Essi wrote in a report by his newsletter Savens, “Every bubble in the history of the modern market is based on a story, whether it is internet or real estate.”

“Today, that potentially bubble-explosive subject is undeniably AI technology.”

What does it look different this time

But for all similarities, there are some very clear differences.

Barry Schwartz Investment firm joined the Baskin Wealth Management as the dot-com bubble was bursting. Today, he is the president of the company and the Chief Investment Officer

In an interview with CBC News, he said, “Unlike the dot-com pre-ravenue companies, these companies are beneficial. They have global distribution, captive customers.”

Schwartz says that Google, Apple, Meta and Amazon all have billions of customers. He says that those business will continue whether the AI game becomes a changer or not. But if this happens, those technical giants will be prepared to take advantage of.

“So it’s not like chicken and eggs. The eggs and chicken are already on the table. The market understands it,” Schwartz said.

US President Donald Trump’s AI Caesar, billionaire David Sachs says that most people do not fully understand where AI development is actually at this time.

“Doomar stories were wrong,” she Posted in social media platform x,

Sachs says that the story was made on the assumption that artificial general would be a rapid take-off for intelligence that would motivate an AI model to improve rapidly to leave others in dust.

But he says, it is happening opposite.

“The major models are clusters around the same performance benchmark,” he wrote in his long post last week. “Model companies continue to jump each other with their latest versions.”

At this point, the models (such as openi’s chat, X’s Groke or Google’s Gemini), which they call “developing areas of competitive advantage”.

Therefore, from a market perspective, a handful of AI models are in healthy competition with each other. Meanwhile, technical giants (Apple, Amazon, Meta simply do some names) are aggressively adopting AI in their business models.

And chip manufacturers like NVIDIA can barely keep with unquenchable demand developed by all those companies.

In this case, NVIDIA has not seen its stock closed. Its revenue is so large that they are difficult to wrap your head around. Since 2022, Nvidia’s revenue has increased quintal. Its profit is more than ten times.

Tariff Uncertainty – even for technology

The possibility of repeating the dot-com bubble may be valid.

But for now, the more pressure threat is that the financial markets begin to pricing under the influence of the global trade war. Many company’s earnings reports have shown how deep tariffs are already being cut.

Automkers like GM and Ford led the charge, but tech companies are not immune.

Apple says that the tariff-related cost will climb to $ 2 billion through the first half of this year.

Schwartz says that he knows how dangerous it is to think “This time is different.” But he says that this issue boils for a very simple calculation.

“It comes down to just a simple question. Do you think we are going to use more AI and data in future or less time?” He said.

And clearly, a quick look on the markets will show you that most investors are answering that the answer is more.