AI Tech Stock Bubble? Stock Market Update, Friday October 24, 2025
Maybe 5 or 10 years from now investors will look back and cry about the 21 trading days in September of 2025 as the 9th inning of the AI tech stock investment bubble like Paul Tudor Jones has recently suggested. Paul Tudor Jones, has said that we are in late 1999 replicating the near end of the Dot.com bubble. My view is I doubt that will be the case. I doubt we are in the 9th inning as he suggested, and the party is good enough to hang around but one should look to quickly exit.
First off, I flat out don’t see the comparison to the 3rd quarters during 1998-20 Dot.com run. The data says otherwise. In fact, the 3rd quarter stock returns was negative each of those years. In PTJ analogy, its early 4q99. I can’t disagree more. In the summer of 1999, the S&P 500 was down -6.69% not up +7.6%+ like we just were in 3q25. Here’s the seasonal table for the S&P500 throughout the Dot.com internet buildout for you to make your own decision.
Source: Bloomberg
PTJ was a world best trader in his days, however I would argue that like most of the retired billionaire HF managers I have heard on financial TV for 5-10 years, most all of their advice has been ill timed or just flat out wrong. They don’t trade the way they did when they were making their fortunes.
If you have been following our videos, we’ve been discussing the Dot.com internet build versus the AI buildout analogy for well over a year and our team has been increasingly positive on it since the mid-April stock market V-bottom this year. Others have been trying to scare you about the comparison in a negative way and about it being a “bubble”. My question to them is, if you are so good at spotting bubbles, why haven’t you been long and investing in it taking advantage of it as you are probably equally as good at getting out on the other side?
This might be the 10th video I’ve done on this the last 5-6 months. In our work, if you are making this analogy, our April 2025 Tariff lows, when the S&P500 was down -21% off its highs, correspond to the LTCM lows in early October 1998, with the S&P 500 also down -21%. Using this as the timing overlay, which has accurately and almost precisely mirrored the Dotcom rally, would put you in is in early April 1999 say 3-4 more months to go in our initial V-bottom rally to more new ATHs. You would be in about the 3-4th inning of the game, not in the 9th inning looking to run for the exit. Would this make sense now? To me the answer is yes. No one still gets in. Here’s the longer term overlay.
And a zoomed in version of where we would be and where we could go in the future.
Source: Bloomberg
What could cause a true parabolic move in stocks farther out in 2026? That might mirror the 2h99, which was post 7th inning stretch into the ultimate top in early 1q2000? Well, just guessing but, a new more dovish Fed chair appointment by President Trump next April/May would correspond almost exactly to the week when the last up leg of the Dot.com run began.
Recall the Dotcom run lasted almost exactly 18 months from the LTCM bottom in October 1998 to its top in 1q2000. But Chris, stocks move on both interest rates and earnings and 2026 earnings can’t support that kind of up move is a comment I’ve heard. Well not if you believe the quarterly earnings estimates that Goldman Sachs has. Here’s their table for quarterly S&P500 earnings growth rates historically and in 2026.
Investors recall that the overall S&P 500 index historically anticipates economic and earnings bottoms by troughing 1-2 quarters in advance of the economy. However, that isn’t the case at market tops. Historically, the S&P50 tops coincident with earnings growth rates. It hasn’t historically peaked in advance of the economy and earnings growth.V-bottoms, historically, do not have ended or deep pullbacks on % terms until after the 10th and 11th month as you approach a year holding period for those investors who bought and help for almost a year. That would be a decent “top” in 1q26 at around 7200. Subsequently the market would sell off for a few months before putting in a low right around when the new Fed chair is installed and then take off for the next 4-6 months in the summer of 2026.
What could cause this? My best guess is the new Fed Chair would reinstate some form of QE again or yield curve control. This would suppress bond market volatility, keep rates low, force investors to move their cash off the sidelines, and ultimately create a rush into riskier assets using leverage. Of course, this is all just guessing and brainstorming about how the markets could continue to mirror the Dotcom boom, but a time earlier in the game and move when you should be in the markets and still not fearing a bubble or blow off top.
Know that regardless of the path for the economy and financial markets in the next few months, the investment team at OHFG will be here manning the ship.
Until next week, have a blessed weekend and know that the OHFG team is doing what we can to plan for you and your family’s future regardless of what stage you are at in your career or retirement.
Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect
Chris Perras
CFA®, CLU®, ChFC®
Chief Investment Officer, Financial Advisor
Chris is a seasoned investment professional with over 25 years of experience working with some of the most successful money management firms in the world. Chris has made it a point in his career to adapt as the market landscape changes, seeking to utilize the appropriate investment strategy for a given market environment. His transition from managing billions of dollars at the institutional level to helping individuals and families retire is guided by a desire to see first-hand the impact he is making in the lives of clients at Oak Harvest.
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