AI vs Dot-Com: Repeating History? Stock Talk Update, Friday April 3, 2026

We’ve asked this question for almost a year now. Are we reliving 1998-2000, the Dotcom Capex boom and internet and mobile internet buildout, in the AI investment cycle or is this something new and different?

Investors, today’s AI boom continues to feel familiar to me and I had the opportunity to work in San Fran and then manage money with Charles back in Houston during the Dot Com run in stocks.  Both cycles look and feel a bit similar with some twists.

Both were periods of Rapid capex investment. Some tech and infrastructure stocks soared with big promises about the future. But underneath the surface—this cycle is not exactly the same. And these difference matters for your portfolio and your retirement.

THE COMPARISON

Today, we’re going to compare one more time, two very specific moments:

The stall and re-acceleration phase of the dotcom cycle which was summer of 1999, second and third quarter with the current trailing 2 quarters 4q25 and 1q26 and the and the reacceleration phase of AI today.

As far as stocks go, think of both periods as the 7th inning stretch. Not the beginning of the cycle. But it’s likely, not the end either. It’s the point where momentum is strong, many stocks and valuations paused, but some risk was starting to build.

CAPEX COMPARISON

In 1999, companies were racing to build the internet. Back then it was fiber networks,
telecom infrastructure, and eventually the mobile internet. Massive capacity was being built, but it was ahead of real demand. Ahead of Amazon, ahead of Netflix and streaming services, and ahead of most mobile telephone applications we use today. That summer—mid-1999—was the 7th inning stretch.

But the real excess in equity markets came after that…into late 1q2000.

In many ways, today looks eerily similar to that period—but it’s fundamentally different. AI spending is not early-stage buildout. We are three+ years into it with the launch of ChatGPT being Nov 30, 2022. It is acceleration—driven by real, existing usage and demand for compute.  For systems driven by NVDA and others semiconductor chips.

AGENTIC AI SHIFT

Here’s what’s just changed that many investors don’t yet see, the parabolic AI chat growth in 2023-2025 has recently gone exponential in 1q26. Really this has happened since the Open Claw app had its moment and its rebranding on January 29, 2026. This was a tipping point, beyond the VibeCoding moment in 2025. AI is no longer just a tool. It’s becoming agentic—what’s that mean?

Agentic are Systems that act on their own. They run queries. They Make decisions. They give suggestions and Execute tasks—automatically. 24 hours a day, 7 days a week, every day of the year if needed.

This shift and that tipping point is driving, Explosive demand for computing power, Rapid expansion of data centers, And most important—real revenue growth in applications at Anthropic, Open AI, and Googles Gemini platforms.

So unlike 1999—This is not: “Build it and hope. “This is: “Build it because it’s already being used.” Just ask Jensen Huang founder of Nvidia. He spent the better part of half of of NVDA’s GTC event on calling OpenClaw the most popular, the most successful open-sourced project in the history of humanity,” “This is definitely the next ChatGPT,” the CEO asserted. What is openClaw? OpenClaw is an open-source autonomous AI agent platform that goes beyond traditional chatbots. Instead of answering questions, these agents can complete tasks, make decisions, and take actions with minimal input from users. It’s a dipping point.

PRIVATE VS PUBLIC CAPITAL — KEY DIFFERENCE

Now here is one of the most important differences—and one many investors miss.

In 1999: Capital flowed through public markets, IPOs surged, Speculation spread quickly and Retail investors carried much of the risk. Charles and I reminisce that we would spend most days in 3-5 IPO roadshows with companies and bankers.

In 2026: The most important AI companies are still private. OpenAI. Anthropic. Byte dance in China. Their funding comes from: Large institutions, Strategic partners and other Big tech platforms not from retail investors, Morgan Stanley and Goldman Sachs.

So the structure is different:

Back in 1999, a long long time ago when I was early in my career, the risk was largely public. Today, much of the risk is still privately held. That doesn’t remove risk. But it changes where it sits.

ECONOMIC BACKDROP

Now lets step back to the broader economy then and now.

In 1999: Economic Growth was strong, The Federal Reserve was tightening interest rates BUT it was also creating special liquidity in anticipation of potential Y2K disruptions in 1999–2000.

Today: Growth is steady—not overheating, and pre-Iran war, about to accelerate in 2-4q. Inflation was about to peak at around 3.5% and come down and the Fed is on hold but should be leaning to ease with a new Fed chair by mid-year.

MARKET BEHAVIOR

As far as financial Markets are concerned, they do look familiar.

In both periods: Leadership was concentrated technology companies and sectors driving the big index returns, but energy stocks also did ok.

But here’s the key distinction: In 1999: Many companies had no earnings, traded at multiples of revenues, or multiple of clicks, webpage views, or as it was known back then “eyeballs”. And, investors if they did have EPS, they traded at 50-100x EPS. See the valuation on CSCO back in the day and compare it to NVDA nowadays. Many Valuations back then were based on hope.

Today: Market leaders are: Highly profitable, generating real cash flow and Seeing earnings accelerate with AI demand. Yes, admittingly, tmany are now FCF negative given their huge capex spends and moving from asset light to more asset heavy. That is a major change.

So, the risk today is not: “no earnings.” The risk is paying too much… for very good current earnings and uncertain future earnings and marginal ROIC.

INTEREST RATES

Interest rates often decide how these cycles end. In 1999: Rates were rising and Liquidity was tightening. This pressure, and too much speculation, eventually broke the market.

Today: Rates are also rising on inflation concerns. Hopefully, Liquidity improves because Financial conditions have tightened in March on the back of the war in Iran.

A new Fed Chair can help extend the cycle—but it does not eliminate risk.

 WHERE WE ARE — 7TH INNING ANALOGY

So where are we right now? A little history lesson and a return to our much-shared SP500 overlay, here’s the updated chart. Remember no guarantees.

Think back to 1999: Mid-year was the 7th inning stretch. The market stalled for about 6 months after a V-bottom rally following the strong 7-month rally post LTCM recovery in October 1998. After 3q99, the markets kept rising—before peaking in very late 1q2000.

Today—late 4q2025 into early 1q2026—also looks and feels like the 7th inning.

Which could tell you two things: There is still likely upside in stock markets, But the risk is increasing to the economy, particularly with the recent Iran oil, energy, and supply-chain shocks, and potential risks to stocks and earnings might be beginning to build beneath the surface. One of the leading groups back then? The growth of the cyclical semi-equipment industry.  Once again here’s that overlay updated.  Once again, it looks like the 7^th inning stretch right before orders for AI inference accelerate in 1-4q2026.

So investors, what are the main takeaways?

First:

This is not 1999, although it is rhyming a lot. The foundation of the AI capex cycle, profits and existing demand, is much stronger today and valuations are much lower.

Second:

While we are not early in an economic expansion, due to agentic tipping point, we are likely entering the re-acceleration phase, which should be good for many stocks.

Third:

The structure of risk is different. In 1999, it was in public markets and widespread. Today, much of it remains in private markets and concentrated.

 

Investors, we know history doesn’t exactly repeat, but given humans repeat many past behaviors, and studying behavioral finance, it often rhymes.

Right now, we’re still seeing echoes of 1999…but with a stronger foundation underneath and just exiting the 7^th inning stretch.

Stay disciplined. Stay diversified. And focus on what’s real—not just what’s exciting.

Whether your priority is growth, income, or a combination of both, our team is here to help you plan for your family’s financial future — no matter where you are in your career or retirement journey.

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