"Twenty-five years after the dot-com bubble saw internet hype grip markets - and then spectacularly unravel - AI is once again fueling market frenzy. However, there are some key differences in how investors are approaching today's market compared to the dot-com boom era, according to Ben Snider, an executive at Goldman Sachs who will imminently become its US equity chief. Today's investors are focused on tangible, near-term earnings rather than speculative long-term potential of AI, said Snider, in an episode of Bloomberg's Odd Lots podcast,"
"During the dot-com bubble of the late 1990s, they tried to look forward and estimate the long-term productivity gains and economic benefits of the internet, which caused valuations to expand dramatically, Snider said. "Today, investors are saying we saw what happened that time. It's too hard. And so what we're really going to focus on is the earnings today," Snider said."
AI-driven enthusiasm has pushed markets but investor behavior differs markedly from the late-1990s dot-com era. Investors prioritize tangible, near-term earnings rather than speculative long-term productivity projections, concentrating capital in semiconductors, hyperscalers, and power companies. A Speculative Trading Indicator that captures activity in unprofitable, penny, and high-valuation stocks shows speculative trading remains well below levels seen 25 years ago and during the 2021 episode. Overall market sentiment has been relatively subdued despite talk of a bubble, with fewer speculative positions and a greater focus on current earnings performance.
Read at Business Insider
Unable to calculate read time
Collection
[
|
...
]