Today's AI Frenzy vs Yesterday's Internet Frenzy
The current AI boom stands in stark contrast to the past internet bubble. The performance of the chip index relative to the S&P 500 index is close to the peak of the internet bubble. Recently, Oracle's profits fell short of expectations, leading to a sell-off in AI stocks. Goldman Sachs' Bobby Molavi vividly metaphorically stated that although people always feel the party will last, the hangover will eventually come, and the key is when
The most popular comparison nowadays might be "AI bubble vs Tech bubble."
The relative performance of the semiconductor index (SOX) compared to the equal-weighted S&P 500 index is nearing its highest level since the internet bubble.
Reports of Oracle's profits falling short of expectations led to a round of sell-offs in AI stocks.
Goldman Sachs' Bobby Molavi perfectly summarized this: "It's like going out to party at 3 AM... you always feel like it's not the right time to go home... you think this fun will last forever... continuing to party and dealing with the hangover tomorrow always seems like the right decision. Until the hangover actually comes. But... hangovers almost always happen... it's just a matter of 'when' not 'if.'"
