"The A.I. Gold Rush: Analyst Dan Ives Compares the Current Era to 1995, Not 1999 Dotcom Boom"

Investors and analysts foresee long-term growth in the tech sector driven by artificial intelligence, drawing parallels to the early stages of the dotcom era in 1995 rather than the peak of the bubble in 1999.

Tech analyst Dan Ives suggests that the current enthusiasm for artificial intelligence (A.I.) is comparable to the dotcom boom, but he believes it is more akin to the early stages of the dotcom era in 1995 rather than the peak in 1999. The release of OpenAI's ChatGPT in November has fueled investor interest in A.I. and its potential to transform the global economy. Despite concerns over inflation, rising interest rates, and predictions of a recession, the market has seen a rebound, with the tech-heavy Nasdaq Composite recovering most of its losses and the S&P 500 posting significant gains this year.

While some market participants question whether this upward trend can be sustained, citing high valuations in Big Tech and A.I. companies that have driven the recovery thus far, Dan Ives argues that it is only the beginning of what he calls the "A.I. gold rush." He disagrees with those who compare the current situation to the dotcom bubble, asserting that A.I. is driving the tech sector towards a growth trajectory similar to what was experienced in the 1990s.

The parallels between the dotcom era starting in 1995 and the current A.I. revolution are notable. In both cases, experts believed that a groundbreaking technology would reshape the global economy. At the time, stocks were recovering from a down year, and concerns over the U.S. national debt raised worries about the country's future. Books like "Bankruptcy 1995" warned of an imminent economic crash due to America's "deficit crisis," which ultimately did not materialize.

Despite the pessimistic predictions, the Nasdaq Composite soared over 800% between 1995 and the collapse of the dotcom bubble in 2001, as the economy remained stable and investors sought to profit from the internet’s rise. However, the index later retraced most of those gains over the next year and a half when valuations returned to more reasonable levels. Nevertheless, 1995 marked the beginning of the dotcom bubble, rather than its end.