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Editor’s Note: My colleague, growth investing expert Louis Navellier, has been investing through major market cycles for nearly 50 years, including the internet boom of the late 1990s. Recently, he told me that the AI boom reminds him of that period in surprising ways.
Not because he thinks the market is about to crash, but because he believes investors need to be prepared for both opportunity and volatility.
I invited Louis here today to explain what he’s seeing – and why he’s teaming up with TradeSmith for a free special event on June 10 to help investors navigate what’s next. You can register for that free broadcast here.
And here’s Louis…
In 1999, Jeff Bezos was doing something that drove Wall Street absolutely crazy.
Amazon.com Inc. (AMZN) was already a public company. And it was already capable of producing profits — if Bezos had wanted to. But instead, he kept aggressively reinvesting. Instead of worrying about profits, he was building warehouses, distribution infrastructure, and technology systems.
Every quarter, the margins that should have been there weren’t, because every dollar was going right back into the Amazon machine.
Analysts were furious. Where are the profits? What exactly are we owning here?
Meanwhile, all around Amazon, the dot-com boom was producing companies with no revenue, no product, sometimes no coherent business model at all — and their stocks were tripling. The whole market was chasing a story.
Who looks most like the future? Who has the best narrative? Wall Street was funding them fast and asking questions later.
Bezos wasn’t playing that game.
What he understood — and almost nobody else did back then — is that 1999 capital was a once-in-a-generation resource. Every dollar of market enthusiasm could be converted into permanent infrastructure: fulfillment capacity, distribution reach, systems that got cheaper the more volume they handled. He wasn’t optimizing for this quarter. He was building something that would be almost impossible to replicate once the window closed.
When the music stopped in 2000, it stopped for everybody. The story companies – do I need to mention Pets.com? – vanished almost overnight.
Amazon went through its own brutal drawdown, but the infrastructure Bezos built was still there. The customer relationships were still there. The cost curves were still bending in the right direction.
By 2005, Bezos looked like a genius. In 1999, he just looked tactical.
I was managing money through all of it. And I’ll tell you — 1999 was one of the best years of my career. It was also one of the strangest markets I’ve ever seen in nearly 50 years in this business. Capital was flowing faster than fundamentals could justify.
My Stock Grader system kept me focused on what actually mattered: real earnings, real institutional conviction. A lot of the dot-com darlings never showed up in my system at all — and a lot of them went to zero.
But the companies with genuine fundamentals underneath the noise survived. And the ones — like Amazon — that used the window tactically didn’t just survive. They won the whole decade.
Right now, the AI boom is rhyming with that moment in ways that I find both exciting and instructive. But at the same time, this is not the dot-com boom — the fundamentals are far stronger.
So, in this piece, I want to show you why this AI boom reminds me so much of the late 1990s… why I believe some AI stocks could be much higher by year-end… and why the smartest move today is not to run for the exits when things get choppy, but to get more tactical.
And finally, I’ll tell you about a new tool that can help you do just that…
The ChatGPT Moment
I recently got my hands on a chart from our friends at Bespoke Investment Group comparing the Nasdaq Composite’s performance during the internet boom of the late 1990s with its current path during the AI boom.
The comparison is striking.
ChatGPT appears to have done for AI what Netscape did for the internet.
When Netscape came along, investors realized the internet wasn’t just a neat new technology. It was a business revolution. Money poured into the companies building that new world, and the Nasdaq soared.
We’re seeing that same basic story today.
ChatGPT woke people up to what AI can actually do. And Wall Street quickly figured out how much infrastructure that was going to require.
The fact is that the boom is backed by real sales, real earnings, and real order backlogs.
Look at Bloom Energy Corp. (BE), for example. The company helps make fuel cell generators, which data centers need to produce power on-site so they don’t have to rely on the electrical grid.
Bloom Energy’s current product backlog is about $6 billion, while its total backlog exceeds $20 billion.
At this rate, it will take years to deliver what is already in the pipeline. And Bloom Energy isn’t an outlier. This story is playing out across the AI and data center space.
Companies are receiving more orders than sales. That makes this a real capital spending cycle.
That is why I remain bullish. Personally, I think the AI and data center stocks across my premium services could be another 30% to 40% higher between now and the end of the year.
But that does not mean investors should get complacent.
Summer Could Get Bumpy
August and early September tend to be volatile. Seemingly everyone on Wall Street and in Europe are on vacation, trading volume thins out, and unscrupulous short sellers come out of the woodwork.
So, I would not be surprised if the market gets bumpy.
In fact, Bespoke also shows that the Nasdaq took a significant dip between late May and October 1998 — right in the middle of what turned out to be a historic bull run. I wouldn’t be surprised to see something similar this summer.
But here’s the key insight: If the AI Revolution continues to follow the internet boom’s path, a summer pullback would not mark the end of this bull market. It could simply set the stage for much higher levels later in 2026 and beyond.
That is why I do not want you to follow the “sell in May and go away” crowd to the exits.
We remain in one of the best earnings environments of our lifetime. Analysts continue to revise estimates higher. Companies keep beating expectations. Fundamentally superior stocks with accelerating earnings and sales growth should continue to lead.
But there is a big difference between staying invested and just closing your eyes.
The late 1990s created tremendous wealth. But that market did not move in a straight line. Even great stocks got hit hard from time to time. The investors who panicked during those pullbacks often missed the biggest gains that came next.
That is the real risk this summer.
Not that a great stock has a bad week. The real risk is that you let a bad week scare you out of a great stock right before the next leg higher.
And that’s why I’ve been working with my friends over at TradeSmith on something special – something that’s specifically designed for times like this.
Stay Bullish, but Get Tactical
In my view, the answer is simple: Stay bullish, but get tactical.
That means focusing on fundamentally superior companies. It means paying attention to earnings momentum, sales growth, and analyst revisions. It means having a better way to track whether the stocks you own are still healthy in the short term.
And it’s why I’ve been paying close attention to what my friends at TradeSmith have been building.
On Wednesday, June 10, at 10 a.m. Eastern, I’m teaming up with TradeSmith CEO Keith Kaplan for a special event.
Keith and his team have spent years building technology designed to help investors make more tactical decisions. And during this event, we’re going to show you a new AI-powered approach to navigating today’s faster-moving market.
I don’t want to give away the full story today. That is what the event is for. But here’s the basic idea…
If this market really is rhyming with the late 1990s, investors need to be prepared for two things at once:
- They need to stay positioned for the upside, because I believe the AI Revolution still has much further to run.
- But they also need to be ready for volatility, because even the strongest bull markets can shake people out along the way.
Before the event, you can even test-drive part of the technology for yourself. You can enter the ticker symbols of stocks you already own – or stocks you are thinking about buying – and see how the system evaluates their short-term health.
That is exactly the kind of tool I believe investors should have at their fingertips in a market like this.
When volatility picks up, you don’t want to guess. You don’t want to rely on fear. And you do not want to get shaken out of a great long-term opportunity because the market has a bad week.
That’s why I encourage you to sign up for our free event. And to try out the free ticker tool before the event.
Jeff Bezos didn’t close his eyes in 1999 and hope for the best. He got tactical.
That’s exactly what I’m asking you to do right now.
Sincerely,
Louis Navellier
Senior Investment Analyst, InvestorPlace
P.S. I think Louis makes an important point here. The question isn’t whether the AI boom is over. The question is how investors navigate the inevitable volatility along the way. That’s exactly what he’ll be discussing during his upcoming event with TradeSmith. If you haven’t registered for Louis’ free event yet, I’d encourage you to do so now.
The Editor hereby discloses that as of the date of this email, the Editor, directly or indirectly, owns the following securities that are the subject of the commentary, analysis, opinions, advice, or recommendations in, or which are otherwise mentioned in, the essay set forth below:
Bloom Energy Corporation (BE)
