"The cofounder and CEO of Gerber Kawasaki Wealth and Investment Management told Business Insider that he "traded through" the internet mania around the turn of the millennium. The AI craze "just isn't comparable," he said."
"The S&P 500's 20%-plus returns in 2023 and 2024 may seem unsustainable, but the benchmark index delivered similar returns for five years from 1995 through 1999, Gerber said. He started his career with "perfect timing" in 1994, he added."
"When Magnificent Seven companies trade at lofty earnings multiples, they're considered overvalued "because people have never seen numbers that big," Gerber said. But the tech investor said their valuations aren't out of sync with their businesses, calling their profitability "just insane.""
"Warren Buffett's Berkshire Hathaway has taken little interest in the AI frenzy, even selling nearly 70% of its Apple stake in the 18 months up to June 30."
The AI craze is not comparable to the dot‑com bubble. The S&P 500 posted 20%+ returns in 2023 and 2024 and previously delivered similar five‑year gains from 1995–1999. Major tech companies trade at lofty earnings multiples, but exceptionally high profitability supports those valuations. Alphabet generated over $100 billion in net income last year and Nvidia's profits rose more than 50% year over year last quarter. Investments in Tesla and Nvidia about a decade ago now sit within a portfolio managing over $3 billion in client assets. AI has large potential to boost productivity and earnings, while smartphones are described as counter useful and time wasters. Berkshire Hathaway sold nearly 70% of its Apple stake and maintains limited AI exposure, leaving a portfolio characterized as of the past.
Read at Business Insider
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