AI Stock Rally Sparks Dot-Com Bubble Worries
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Stocks connected to AI have rallied strongly, sparking worries of a dot-com like bubble fueled by irrational exuberance.
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There are similarities and differences with the dot-com bubble. AI will benefit productivity but stocks may be overvalued.
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Cisco was the poster child of the dot-com bubble; Nvidia embodies the current AI stock mania. Stock has surged 300% since ChatGPT release.
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Supporters argue this time is different - tech companies have strong fundamentals and valuations are not as extreme. But there are still parallels to 2000.
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Even great tech companies can become overvalued. Investors should be wary of getting caught up in irrational exuberance around AI stocks.