Because people remember the tech bubble period, we doubt that people will again say that ‘earnings don’t matter’ or ‘revenues don’t matter’ - or at least that could still be some time away.
Naturally, investors will look to track measures like the intensity with which firms are using AI or engaging with data.Additionally, at least so far, not many private companies have tapped the public markets. There are some companies putting “AI” in their names, but it is not yet a huge number, and they have real business reasons for doing so.Hundreds of billions of dollars of market capitalization was supported by dreams of wild future profits.Īnd what has been happening in the first half of 2023: Many leading internet companies did not have positive earnings, but even in the more established S&P 500, which requires profitability for inclusion, price levels approached 100x earnings for many large-cap names.In the absence of profits or even sales, new metrics were created to make the case for progress in business, like webpage visits or clicks.Any company could do so, regardless of real business prospects or potential. When companies put the suffix “.com” in their name, their share prices soared.The quintessential bubble developed in the late 1990s.
We wanted to explore this idea further with this piece. He pointed out that what we are seeing in 2023 is not similar to what we saw in 2000 when the tech bubble burst, especially in terms of fundamentals and valuation. We also recently spoke with Professor Jeremy Siegel, who has written extensively on the historical performance of equities. Many are now drawing parallels between the current tech enthusiasm and the dawn of the internet.
Even if we know past performance is not indicative of future performance, we are still comforted when we draw parallels to the past. History shapes our views, and we are always seeking analogues to current events. 29, 2023 9:10 PM ET AAPL, AMZN, GOOG, GOOGL, META, MSFT, NVDA, VO, MDY, IJH, IWR, PWC, FNX, EZM, RYJ, CSD, CZA, BUL, XJH, IMCB, IVOO, EWMC, SCHM, ONEO, EQAL, REGL, PTMC, JHMM, DEUS, XMHQ, FLQM, FTDS, JPME, RNMC, USMF, SPMD, VFMF, VFMV, VFQY, FSMD, SFYX, TPLC, AFMC, SMDY, SQEW, PAMC, SIXL, BKMC, HLGE, QVMM, BBMC, MIDE, VXF, IJK, IWP, VOT, RFG, FAD, FNY, IPO, CWS, IMCG, MDYG, IVOG, XMMO, BFOR, ARKK, FFTY, ETHO, QMOM, JSMD, NUMG, BOSS, HAIL, VFMO, PEXL, BOUT, KOMP, QQQN, BFTR, QQQJ, MID, FRTY, PY, PEY, IJJ, IWS, VOE, DIV, DON, FAB, RWK, NVQ, YPS, IMCV, MDYV, IVOV, XMVM, XMLV, SYLD, VUSE, QVAL, ONEV, ONEY, NUMV, WBIY, SDVY, VFVA, DVLU, DDIV, VRAI, HOMZ, FOVL, TPHD, TMDV, STLV, LSAT, FSMO, RSPT, SMH, XLK, IGN, IGM, IXN, IYW, VGT, IGV, PSI, PSJ, PXQ, FDN, XSD, PTF, FXL, XSW, AIQ, BUG, TDV, WFH, XNTK, QTEC, PNQI, PSCT, NXTG, SOXX, GAMR, SKYY, SOCL, TDIV, FTEC, ARKQ, ARKW, HACK, CIBR, ITEQ, XITK, XWEB, PRNT, FINX, SNSR, FTXL, FITE, DTEC, IZRL, BLOK, BLCN, LEGR, ROBT, KOIN, IETC, OGIG, IRBO, LOUP, QTUM, ESPO, ARKF, CLOU, IHAK, WCLD, HERO, FNGS, LRNZ, WUGI, THNQ, TECB, BTEK, ANEW, MOON, ARKX, GINN, WCBR, DAPP, ILDR, IDAT, SOXQ, METV, XPND, XDAT 2 Comments 5 Likes
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