Why the AI Boom Isn’t like the Dot Com Era – and What Comes Next

Earlier this week marked a significant milestone in market history.

It was 25 years ago on March 24, 2000, that the Dot Com bubble burst.

On that day, the S&P 500 posted a record level it wouldn’t see again until 2007.

The S&P lost almost half its value before it reached its nadir on October 9, 2002.

The tech-heavy Nasdaq was hit even harder. From its peak on March 10, 2000, the index would drop almost 78% to its bottom on the same date, October 9, 2002.

It wouldn’t recover for more than 15 years.

Many people compare the current AI investing megatrend to the Dot Com bubble. They warn that the AI megatrend is going to have a similar bust soon, and it will be just like 2000 all over again.

Another 15 years lost as the market slowly recovers.

But the comparison doesn’t hold up.

Why This is Not a “Dot Com” Market

The poster child for the Dot Com Bubble is Pets.com. This was an online pet supply retailer, much like Chewy today. Older investors may recall its Super Bowl ad featuring a sock puppet mascot.

In 2000, its IPO had them trading at $11 a share. But they were losing money fast from Day 1 and went bankrupt that same year.

During the Dot Com bubble, companies focused on “eyeballs first” rather than profits. But in too many cases, the profits never materialized.

In contrast, the AI Megatrend winners are companies that are expanding earnings with AI. The poster child is, of course, Nvidia (NVDA).

NVDA has beaten EPS estimates every quarter since the beginning of 2023.

Source: Alphaquery.com

But just because the AI Megatrend isn’t a bubble that doesn’t mean there isn’t danger lurking.

If you’re not careful, you could fall into a familiar trap.

Market Echoes from 2020

It was back in 2020 that InvestorPlace’s big three analysts – Louis Navellier, Luke Lango and Eric Fry – started to warn people about the “Technochasm.”

If you’re not familiar, the Technochasm refers to the vast wealth divide in the United States that is caused, in large part, by technology.

At the heart of this warning was a prediction – the future will be populated by two types of people: those who invested in top tier tech companies who would watch their portfolios grow, and those who didn’t invest in tech, or simply held old-school stocks for much too long, who would watch their balances shrink.

Credit: TarikVision

The skyrocketing inflation of the Biden years only made this warning more ominous. Folks who didn’t own the best tech assets watched the value of their portfolios stagnate or even erode.

This week, our analysts doubled down on this warning.

And the stakes are higher than they’ve ever been.

America’s Best in a Race to the Top

On his first day in office, President Donald Trump rescinded President Joe Biden’s executive order that sought to restrict the development of more powerful generative AI tools.

On his second day in office, Trump met with executives from leading technology firms including Sam Altman, CEO of Open AI; Larry Ellison, chairman of Oracle; and Masayoshi Son, CEO of SoftBank. Together, they announced “Project Stargate” – a $500 billion private sector investment in AI infrastructure.

“Beginning immediately, Stargate will be building the physical and virtual infrastructure to power the next generation of advancements in AI, and this will include the construction of colossal data centers,” Trump said.

America hasn’t undertaken a project this important since the Manhattan Project – the effort that developed the atomic weapon during World War II.

The brightest minds and most powerful companies in America are all working to ensure that the most powerful technology of our time is controlled by U.S. companies. 

This effort could lead to nearly a trillion dollars of funding and investments into a specific corner of the markets over the next few years.

When that much money is moving around, there are select opportunities for investors to build their wealth quickly. A small handful of stocks could be the biggest winners as this money starts to spread throughout the economy and the stock market. 

The gains we’ve seen from the first two years of the AI Megatrend have been impressive, but the coming gains could be bigger still. 

In this exclusive presentation, Louis, Luke and Eric show the “smoking-gun” evidence that we are nowhere near the top of this epic bull run in AI.

Bottom Line: if you missed out on the big gains from AI stocks since 2023, you have a rare second chance to get in on some of the most innovative companies in the world – through the AI Revolution Portfolio. Our three analysts believe their latest batch of picks easily has triple-digit upside in just a handful of months.

In this presentation, Louis, Luke and Eric reveal why nearly a trillion dollars of new investments could soon flood two little-known corners of the AI Revolution… how it could accelerate the lucrative AND destructive force behind the Technochasm… and what you need to do to prepare (and profit).

The AI Megatrend isn’t the Dot Com bubble.

Your biggest risk may be hesitating to take advantage of this rare second chance opportunity to grow your wealth.

Enjoy your weekend,

Luis Hernandez

Editor in Chief, InvestorPlace