No, the AI Bubble Isn’t Worse Than 1999

Here’s a sobering thought. Today’s AI bubble is bigger than the tech bubble of the 1990s, according to Torsten Slok, the chief economist for Apollo whose brief daily emails are widely followed. He bases that statement on his analysis that the top 10 companies in the S&P 500 are today “more overvalued than they were in the 1990s.”

If this is true, then tech investors should be bracing for the mother of all market crashes. Anyone above the age of, well, 45 remembers the tech winter that followed the 2000 market crash. Lots of dot-com companies disappeared, and it took a few years before the sector got back on its feet. The most recent parallel might be the crypto slump of 2022 that triggered the collapse of numerous crypto firms. But is Slok’s analysis correct? Not necessarily.