AI boom mirrors the 1990s Netscape era
The guest argued that the current AI-driven market is in the early-to-mid stages of a multi-year, tech-led expansion similar to the 1994-1999 internet boom, where both stocks and volatility rise together.
The argument
The guest noted that we are likely only in year two of this cycle (akin to 1995 or 1996). He expects the build-out of AI infrastructure to continue driving valuations and volatility upward for another four to five years before reaching a peak.
The thesis, stress-tested
✓ What validates it
- ✓Practical AI application companies showing robust revenue growth
- ✓An eventual systemic credit event or high-profile corporate failure that tests market leverage
▸ Risks discussed
- ▸Stretched forward PEs in the low-to-mid 20s historically yield flat 10-year returns
- ▸Potential for a major credit or systemic shakeout event (similar to the 1998 Russian debt crisis)
- ▸Risks of circular vendor financing among AI players failing to materialize into real cash flows
Hear it yourself
"Given the, like, severity of the bull market, right, that we've seen in the last, call it, you know, two years since basically the boom of of AI and and basically we got past 2022, you would expect the VIX to kinda be like around a 12 or 11 or something like that given how well the markets behave."
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