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We have reached the point in the artificial intelligence (AI) cycle where the story is no longer enough to support the multiples. For the past two years, you could slap an AI label on almost any tech firm and watch the stock price defy gravity. But as I’ve seen in every tech cycle since the 1990s, the market eventually sends a bill for all that exorbitant spending.
Yet at the same time, I remember quite well how tech stocks cruised higher by about 75% in late 1999 and 2000 — before they fell by about the same percentage. The back end of that round-trip move kicked off more than a decade of flat returns.
