닷컴 버블 경험자분들의 조언을 구합니다💭

Current AI related evaluations could definitely be a “bubble”, but it’s not comparable to the dotcom bubble, and I’m tired of hearing about it on reddit from people who haven’t even looked at the numbers. From 1995-2000, the NASDAQ went up over 500%. In the last 5 years, the NASDAQ has only gone up 100%. During the height of the dot-com bubble (1999-2000) it went up 100% in 1 year alone. At its peak, the NASDAQ 100 PE ratio was at 175. Today, it's around 30. The current bubble is actually backed up by earnings growth. Is it possible that earnings growth slows down because of lowered CAPEX or macro events? Absolutely. But this isn’t the dotcom bubble.

**Nasdaq-100 Peak:** Reached a forward P/E of approximately 60x in March 2000. But yes. Things are feeling bubbly. The thing with bubbles is that you have no idea when they will pop or why

Here’s what people don’t seem to understand about the dot com bubble: The dot com bubble still had plenty of successful companies that eventually took all & rose from the ashes. The problem was not whether or not you *could* monetise the internet. The problem was that a bunch of companies weren’t profitable enough to make up for the massive expenditure in outgoing cash. Companies that only had ideas or some loose semblance of a business went under.

How does that apply to AI and tech at present? None of the companies doing it are turning a profit *on AI* yet. The sheer amount of capital that is being poured in to AI is utterly unsustainable indefinitely, even for massive companies like Google and Meta. Companies have to bring in substantially more money to continue this kind of spending or it’s going to eat away at their capital. Companies that are smaller cannot complete with Google, Meta or even Microsoft. That said, all of the AI stuff requires massive investment. Simply having some AI ability and marketing it isn’t sustainable in the long term. Do I believe Google is probably in a much better position than the others? Yes.

Every AI company is not going to be successful. AI itself is here to stay, sure, but to make legitimate comparisons to the dot com bubble, I don’t think it’s necessarily something you can do based solely on numbers, even adjusting for inflation, specifically due to how much money it takes to sustain.

No one can tell you when a bubble will pop or what companies will be on top… but it will pop and it isn’t going to be all of them taking all. More likely, you’ll see a few giants and those without the capital to expend will fold. This is specifically why I find companies like SpaceX and OpenAI to be so troubling. They’re too big, they’re all hype, and I’m just waiting to see everyone dumping a ton of money in to something like OpenAI only for it to go tits up, and well… queue 2008 v2.

There is no wisdom. Different era, different environment, different evaluations. Apples to oranges

AI will soon trigger a slew of tech stock market correction. Looking at overspending by govt and bad publicity using AI results to attack a school and killed 175 students is asked by congress over and over. The lawmakers suspect Maven Smart System, used via Palantir, for target identification is trash. While AI is a better tool used today to analyze data. I do not see the stock is worth 155 P/E. For the same reason I do not invest in these companies. Same with govt jail stock. Overcharge government costs so much on taxpayers while the money spent the return is now in question already. During disastrous over-projection what benefits internet will bring us in the 1990s. I took out stock putting in very safe schemes. Others kept losing more. Intc stock never recovered until recently. MSFT took 16 years to regroup and recover just after Covid. This time I already took 80% AI gains into munibonds. Some are performing better than stocks. Still got 20% of AI stocks. A crash will not impact me as much.

So...I don't really have a way to verify or prove any of this, so do what you want with this information - it's not financial advice, anyway.

I live in Ottawa. I go to a lot of networking events. We have a pretty big tech scene.

I don't talk to a lot of finance types (although I'm trying to move in that direction), but I DO talk to a lot of tech people (or people doing non tech things for a tech company). Like...a lot a lot. You really can't throw a potato without hitting 3 of them.

I don't know the financial side of the dot com bubble, but what I can tell you is that a lot of the people currently working in the industry were working in the industry when the dot com bubble happened...and every single one of them have straight up told me that things feel a lot like they did prior to the dot com bubble popping .

If you want an idea for how infrastructure people fared compared to vendors, look up what happened to Nortel.

The dot.coms never made any money.

In the dotcom bubble, no miners showed up to buy the picks and shovels. In the AI bubble, if the miners show up, the picks and shovels get bought.

It is just insane to me that EVERYONE and their mothers are saying buy DRAM. Get in now! Double in 1 year! This is unlike anything I've ever seen before, and it's very concerning. I can't help but think this is eerily similar to the dotcom bubble. I know times are different, and tech adoption is very fast nowadays. Still, it's concerning.