Investors can’t get enough of a firm at the vanguard of a hot new tech sector. More and more people rush in to buy shares until the firm outstrips Microsoft and becomes the most valuable company in the world. This storyline describes the meteoric journey of AI chipmaker Nvidia. But it also could have been written a quarter-century ago when networking-gear maker Cisco—currently No. 74 on the Fortune 500 list—leapfrogged Microsoft to become No. 1 in market cap.
The Wall Street Journal reported on the parallel this week, noting that the rise of Nvidia—whose share price has soared nearly 30,000% in the past decade—is reminiscent of the dotcom era when the hot new tech was not AI, but the internet. That era ended with a thud as the tech-heavy Nasdaq index fell over 50% in the year 2000 as Cisco and other once-hot stocks came down to earth. This doesn’t necessarily mean the current Nvidia-led boom will end in tears, too, though some are getting antsy.
