AI stocks are exploding just like internet stocks did in the ’90s. Here’s what history can teach us.
Transcript:
SCOTT BOK: I think the AI driven rally that we’ve seen in some ways echoes the bubble of the late 1990s, I mean, and that ran for a long time. I always remember because it was just before I joined my the new firm, Greenhill, that was a merger and acquisition specialist that Alan Greenspan famously said in 1996 that the market was exhibiting some irrational exuberance, and people thought that was a real sign the market was too high. The market proceeded to go up for like 3 plus years from there to even new heights, again and again and again. So it’s very difficult to call these turning points. But I think, you know, there are some echoes to what we’re seeing in the markets today. I mean, there was a lot of excitement back then about the internet. Today there is about, one of the lessons of that period of the 90s is that some companies were great investments. I mean, Amazon, for example, looked like a lot of the other losers of that period. And people thought, well, they’re losing so much money every quarter. Is that ever going to really turn around? Well, obviously Amazon is one of the most valuable and important companies in the world. You know, in 19, late 1990s, if you had the wisdom to be able to sort Amazon out from the many players that really had less solid business models, obviously you would have made a lot of money with that decision.
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