It seems to us that we could be on the cusp of a huge new tech bull market as big as the dot-com boom of the 1990s. And it’s all thanks to artificial intelligence ().
We’re noticing a ton of similarities between the early 1990s and present day.
Specifically, the economic and market dynamics of 1990/91 have strong fundamental and technical similarities to the dynamics of 2022/23.
Throughout 1990, the economy slowed meaningfully because of the Federal Reserve’s restrictive monetary policy.
Similarly, throughout 2022, the economy slowed meaningfully for the same reason.
In 1990, stocks dropped about 20% from peak to trough. Likewise, in 2022, stocks dropped about 25% from peak to trough.
But in late 1990, the Fed shifted dovish and started cutting interest rates. The economy restabilized. The stock market pushed about 20% higher in the first few months of 1991, despite critics claiming the market was still doomed.
In late 2022, the Fed shifted dovish and downsized rate hikes from 75, to 50, to 25 basis points. And now the central bank is entertaining a pause. The economy has restabilized. As a result, the market has pushed about 20% higher from its late October lows, despite critics claiming the market is still doomed.
Fundamentally, the 2022 stock market crash looks a lot like the 1990 stock market crash. And thus far, the 2023 stock market recovery looks a lot like that of 1991.
The biggest and most important similarity, however, is the emergence of a world-changing technological breakthrough.
AI Is Sending Tech Stocks to the Moon
In the early 1990s, it was the internet. The world’s first website was launched in August 1991. Wall Street started to grow really excited about the internet’s economic potential. Internet stocks like Cisco (CSCO) and Oracle (ORCL) rose more than 100% in 1991.
In the early 2020s, it is AI. The world’s first true AI application was launched in November 2022 with ChatGPT. Ever since, Wall Street has become obsessed with AI’s economic potential. Leading AI stocks like C3.ai (AI) have jumped more than 100% so far in 2023.
The parallels are too strong to dismiss – and the comparison has strong implications for investors.
The 1991/92 stock market crash and subsequent internet-powered rebound set the stage for the biggest tech bull market the world has ever seen. From 1992 to 1999, the entire Nasdaq Composite rallied nearly 600% as investors salivated over the long-term economic potential of the internet.
We believe the data suggests that the 2022/23 stock market crash and subsequent AI-powered rebound similarly set the stage for a huge tech bull market to develop over the next several years. We wouldn’t be surprised to see the Nasdaq pop more than 500% between 2023 and 2030 as investors salivate over the long-term economic potential of AI.
In other words, we think AI is about to power another dot-com boom in tech stocks.
If so, savvy investors could make fortunes over the next few years.
The Final Word
Back in the 1990s, leading internet stocks like Cisco, Applied Materials (AMAT), Oracle, and Qualcomm (QCOM) soared thousands of percent. If you’d invested $1,000 into each stock in early 1991, you would’ve had over $450,000 by late 1999.
The internet-powered tech boom of the 1990s minted serious wealth.
We think the AI-powered tech boom of the 2020s will do the same.
But do you own the right AI stocks that could mint fortunes over the next few years?
If not, don’t worry – we have the top stock for you to buy today.
It’s a tiny, brand-new firm, developing the next-generation computers that we believe will be the foundation for all future AI software.
And the stock of the firm making these computers is currently trading for less than $15.
But time is of the essence here – because this tiny stock is already up more than 215% in 2023 alone!
Investors are starting to hear about this breakthrough tech stock, and they’re buying it up in a hurry amidst the AI frenzy.
On the date of publication, Luke Lango did not have (either directly or indirectly) any positions in the securities mentioned in this article.