Views on the Phases of the AI Supercycle

Halfway through 2026, the major AI cycle that began in the second half of 2024 is analogous to the internet bubble of 1995-2000. We can see that the current focus is still on rising infrastructure: companies with real businesses in semiconductor equipment, chips, storage, and related fields, which is the early stage of a major bubble. The development of AI can be illustrated with a simple example: the short drama production crews that were popular a few years ago. How much human and material investment is still needed for short dramas now? A small investment in tokens is enough, with the cost threshold significantly lowered. It requires some literary skill, and AI can even teach you that skill;
The previous three industrial revolutions all had such markers, namely a great increase in productivity and production efficiency (speed and quality); From a common-sense perspective, whether looking at technical aspects or certain fundamentals, current tech stocks seem to be flying high in the sky, intimidating. Stepping onto them could lead to a painful fall. However, when we turn the pages of history, tech stocks before 2000 only went higher, with no peak in sight. The only thing we need to judge is how to detect the arrival of the year 2000 and withdraw before it, i.e., when is the late stage of the AI tech cycle, and how to avoid the most severe decline. Before that, we believe companies with real businesses will have immeasurable gains.
How to judge the arrival of the 2000 time point? Since we are comparing the AI cycle to the internet bubble, when infrastructure development spreads to internet tech companies and then to AI concept stocks and hot stocks, that's when the end is approaching. Bull markets are born in skepticism and pessimism and die in euphoria. Why skepticism? Because it hasn't happened before; humans cannot imagine things that haven't occurred. Why euphoria? Because the profit effect of a bull market makes people relax their vigilance and become arrogant.
Even though I believe the AI rally is far from over, the amplitude of the cycle is getting larger. Risk also increases with the rise in stock prices. Looking forward to the performance in the second half of the year. As for how to detect the arrival of the late stage of AI, I currently think it's still too early, so I won't elaborate further.

The stock market carries risks; investment requires caution.
Personal investment philosophy record, not any investment advice.