At first glance, some might see similarities between the dotcom bubble – which burst 25 years ago today – and the current artificial intelligence-driven tech boom, especially since the tech industry is still going strong.
But the facts show this is not the case. The Nasdaq index doubled in value between 1999 and early 2000, yet this surge lacked fundamental or financial support. By contrast, today's market gains have been more gradual and backed by tangible earnings growth. During the dotcom bubble, many of the stock market's biggest names were unprofitable companies with little or no cash flow. Simply questioning profitability was seen as failing to ‘get it'. Today, AI-driven giants like Nvidia, Microsoft, Alphabet, Amazon and Meta are not only profitable but are generating substantial free cash...
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