My Saturday show highlighted the start of the rotation from tech stocks to the broader market, as exemplified in the trends in the NASDAQ and the Small Caps 2000. This trend has continued, and on Wednesday it went into overdrive as the world’s largest technology companies got hammered as concern about tighter US restrictions on chip sales to China spurred a selloff in the industry that has led the bull market in stocks.
I was around for the dot-com bubble, a stock market bubble that ballooned during the late-1990s and peaked on Friday, March 10, 2000. This period of market growth coincided with the widespread adoption of the World Wide Web and the Internet, resulting in a dispensation of available venture capital and the rapid growth of valuations in new dot-com startups.
One common theme is “its different this time”. You cannot apply normal valuation rules, they do not apply. Well, of course the recent AI trends have been driven by confidence of a new business era, and people again are talking about new rules, despite the fact that companies like NVIDA have sold the lions share of their cards to established and cashed up big tech companies like Microsoft, and others in a weird feedback loop. The real benefits of AI for normal downstream businesses are still to come.
So are we seeing the start of another tech-wreck? I think its too soon to tell.
http://www.martinnorth.com/
Go to the Walk The World Universe at https://walktheworld.com.au/
