We may be facing the dotcom bubble 2.0
As US tech stocks lose $1 trillion, we must remember that overhyped tech can cause catastrophe.
The new century had only just been seen in and the atmosphere in financial markets was one of high excitement and riotous celebration.
At Davos that January, the corridors were filled with the sound of what was then a relatively new phenomenon – a veritable cacophony of mobile phone ringtones.
To be seen without the latest Nokia glued to one’s ear was to be a backwards-looking outcast from modernity.
It was a time of great promise, exaggerated expectations and hope for the future as globalisation and technological advancement swept all before them.
But it also marked the exact zenith of the TMT (technology, media and telecoms) bubble.
But this time is different, right? So the high priests of the latest mania – generative artificial intelligence and its progeny, superintelligence – would have you believe.
As for likely winners, it is admittedly a little bit different this time, in that the companies pouring the big bucks into AI are substantially the same as the winners from the preceding IT revolution – Microsoft, Meta, Alphabet, Apple, Amazon and so on.
My thanks to Davide Serra, of Algebris Investments, for drawing my attention to the following shocker:
the market capitalisation of the tech-heavy Nasdaq has rocketed during the bull market of the last 15 years to 145pc of the US’s entire M2 money supply,
which is even higher than it was just before the dotcom crash.
It was to shrink all the way down to 30pc over the eight years that followed.
But this time is different, yes?
Jeremy Warner Telegraph 21 August 2025
https://www.telegraph.co.uk/business/2025/08/21/we-may-be-facing-dotcom-bubble-2/
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