The AI Bubble’s Most Terrifying Bull Is Gearing Up

When it comes to AI, it’s a strong echo to the dotcom boom.

Nvidia, the poster child for the necessary hardware behind AI systems, is akin to that of router manufacturer Cisco.

Cisco shares soared thousands of percentage points in the 1990s, only to collapse once everyone had a PC connected to the internet.

Where exactly are we today in terms of a similar move? In a way, 2025 has looked much like 1998 – early into the bubble, but not quite at the blow-off top.

Financial markets, particularly the Nasdaq, are eerily lining up:

Turn Your Images On

The Nasdaq is following the dotcom rally of the 1990s to a T since the launch of ChatGPT (Source: Barchart)

Looking at how the Nasdaq is soaring since the launch of ChatGPT and overlaying it with the performance following the release of Netscape, the first commercial web browser, it’s another sign that AI is just an updated version of the dotcom boom.

Don’t be surprised if this time it ends the same way – a blow-off top ahead, playing into our Most Terrifying Bull Market thesis – before it all comes down.

For now, there’s still some money to be made. By the time everyone’s looking to ignore the fact that it’s a bubble and marginal buyers are all-in, it won’t take much to reverse course.

~ Addison

P.S.: While today’s chart suggests we’re closer to 1997 than 2000, remember, there were some steep pullbacks along the way during the dotcom boom:

The collapse of the “Asian Tiger” economies, the collapse of LTCM, rising concerns over Y2K…

Don’t chase this rally. Use healthy pullbacks to buy strong, industry-leading companies. Keep stacking gold and bitcoin. When worse comes to worst, you’ll come out just fine.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

When it comes to AI, it’s a strong echo to the dotcom boom.

Nvidia, the poster child for the necessary hardware behind AI systems, is akin to that of router manufacturer Cisco.

Cisco shares soared thousands of percentage points in the 1990s, only to collapse once everyone had a PC connected to the internet.

Where exactly are we today in terms of a similar move? In a way, 2025 has looked much like 1998 – early into the bubble, but not quite at the blow-off top.

Financial markets, particularly the Nasdaq, are eerily lining up:

Turn Your Images On

The Nasdaq is following the dotcom rally of the 1990s to a T since the launch of ChatGPT (Source: Barchart)

Don’t be surprised if this time it ends the same way – a blow-off top ahead, playing into our Most Terrifying Bull Market thesis – before it all comes down.

For now, there’s still some money to be made. By the time everyone’s looking to ignore the fact that it’s a bubble and marginal buyers are all-in, it won’t take much to reverse course.

~ Addison

P.S.: While today’s chart suggests we’re closer to 1997 than 2000, remember, there were some steep pullbacks along the way during the dotcom boom:

The collapse of the “Asian Tiger” economies, the collapse of LTCM, rising concerns over Y2K…

Don’t chase this rally. Use healthy pullbacks to buy strong, industry-leading companies. Keep stacking gold and bitcoin. When worse comes to worst, you’ll come out just fine.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

The NYSE Arca Gold Miners Index is up 123% this year, the best this century.

The last time gold ran this hot — 1979 — savers stood in lines that wrapped around city blocks, waiting hours for Krugerrands and Maple Leafs. Fathers pulled kids out of school to get in line before the shop sold out. Dealers locked their doors mid-afternoon, unable to meet the demand.

It was less of an investment than survival. Inflation made cash a wasting asset, and gold was the last refuge.

We don’t want to see that again.

Gold is best as ballast — steady, weighty, tethering a portfolio to something real. When it turns into the object of a mania, it means we’ve entered the debt crisis of which we’ve long been wary.

The cost to ship cars, refrigerators, and Christmas toys has fallen back to numbers we last saw when the economy was on lockdown.

For these rates to rise, demand for goods needs to rise…. unlikely as President Trump’s tariff strategy is intended to reshore domestic production of these goods in the U.S.

Until factories come online, there will be fewer goods on the shelves. Combined with declining jobs and stubborn inflation, however, that fact may go unnoticed this holiday season.

We’ve been saying for a long time that when it came time to rev up the money printer again, the Fed would do it under some other rubric than “Quantitative Easing” (QE), because by now, everybody knows what that is. YCC? Not so much.

What it means is that the Fed will buy unlimited bonds out at the long end of the yield curve in order to keep yields under some arbitrary line in the sand.

Let’s see, now that the government is shut down, where are we?

Pretty much where we left off: Markets surging higher, backed by the weight of AI capex and gorging on debt; A Congress unable to pay for promises forged in the 20th century’s welfare bureaucracy; A currency bleeding purchasing power with each deficit skirmish; A nation where even butter, coffee, and bandwidth become weapons of policy.