CELENTE: Dot-Com Bust 2.0 Picks Up Pace as DeepSeek Jolts AI Stocks
Trend forecaster called the first Dot-Com Bust in the late 1990s and early 2000s.
Gerald Celente noted the similarities between the first Dot-Com bust and what’s happening today in the tech sector after the release of China’s DeepSeek that claims to have trained for $6 million instead of the $100-million-plus OpenAI and other Western developers have spent to create their models.
NOTE TO READERS: SUBSCRIBE TO THE TRENDS JOURNAL WEEKLY MAGAZINE FOR THE WORLD’S TOP TREND FORECASTS AND INDEPENDENT NEWS ANALYSIS.
“The reason that the Dot-Com bust happened is because the internet revolution had just begun several years earlier,” Celente said. “So there was always speculation. But it doesn't mean it's going to end… it's going to keep going. This is very serious because it’s going to have a lot of other effects, besides bringing down the equities markets.”
Celente and The Trends Journal raised concerns about the overvaluation of tech stocks built on promises of future gains. Mihir A. Desai, a professor at Harvard Business School and Harvard Law School, penned a column in The New York Times on Thursday that seemed to agree with our position.
Even after Monday’s dip, the disjunction in valuations between Big Tech — sometimes referred to as the Magnificent 7 of Microsoft, Apple, Amazon, Nvidia, Tesla, Meta and Alphabet — and the rest of the stock market remains staggering. The Magnificent 7 still constitute more than 30 percent of the market capitalization of the S&P 500 (up from just under 10 percent a decade ago). When you compare their stock prices with their earnings or sales, the traditional way to measure the valuation of a share, our tech Goliaths trade at ratios that are two to three times those of the Unmagnificent 493.
These tech companies were significant drivers of the equities market last year.
DeepSeek, which is based out of Hangzhou, managed to keep its costs significantly lower than….