As Tech shares rise.. Are we heading to a new internet bubble?‎

The surge in AI-related stocks this year has surprised even stock speculators, but its sheer speed and investor exuberance around AI invites some unflattering comparisons to the dot-com bubble of the late 1990s. Market experts, including veteran economist David Rosenberg and prominent Wall Street experts including Bank of America, UBS and TAM Asset Management, have all likened the rise in AI stocks to a boom in correlated internet stocks at the end of the twentieth century – which eventually led to the market crash in 2000.

Internet bubble:

Also known as the dot-com bubble, or the information technology bubble, it was an economic bubble that spanned the period between 1995 and 2000.

The high-tech Nasdaq 100 index has jumped 39% so far this year, mainly driven by a huge rally in AI-related stocks such as graphics processor maker Nvidia, Alphabet Inc and Microsoft Corp. Nvidia stock rose by a staggering 192%, prompting some comments that suggested the stock may be overvalued.

But not everyone thinks the AI stock boom has gone too far. Wharton University professor Jeremy Siegel said he does not see the hype around the sector as a bubble, while Dan Rago, CEO of Tradier, told Business Insider that “talk about the AI bubble is unfounded in the industry.” this stage.”

While Michael Hartnett, chief information officer at Bank of America, said that artificial intelligence is in a “little bubble” at the moment and noted that “artificial intelligence implies the Internet.” He said that asset bubbles, whether it’s the Internet or housing, always start with easy money and end with interest rate hikes by the Federal Reserve.

The dotcom era:

For his part, James Penney, CIO of TAM Asset Management, says that “companies that just mention the word artificial intelligence in their profits are seeing a rise in their share price” and that there is a great similarity to the dot-com era.

As Art Cashin, from UBS Bank, said in his interview with CNBC, “I think artificial intelligence will be a new miniature version of dot-com.” “Everything you hear will have a relationship, even if indirectly, to artificial intelligence, everything including new drugs and medicine, and this will be very interesting.”

In the same context, says the senior economist David Rosenberg, “This type of corporate behavior is not very different from what happened in the dot-com bubble, as one company after another tried to satisfy the appetite of investors for news about how it plans to integrate the Internet into its business – or Boosting stocks just because they added “dot com” to the name.