Is the Market Bubble Beware?
This week, two things happened that will endure as ironic juxtaposition (and great trivia night fodder) in business and finance history.
On Wednesday, Nov. 12, 2025, the Dow Jones Industrial Average closed above 48,000 for the first time in its 129-year history. Also on Wednesday, the U.S. Mint quietly struck the final penny, retiring the one-cent coin after a 232-year run. One symbol of accumulation and momentum, the other of obsolescence.
Even so, the Nasdaq continues to lag, weighed down by cooling enthusiasm around Big Tech. Speaking of which, does anyone know what the Shiller PE Ratio is? Anyone? Bueller? The Shiller PE Ratio is an economic indicator that compares a stock’s current market price to its inflation-adjusted historical earnings record to help determine if it’s over- or undervalued. And this week it was almost as high as it was in November 1999 before the dot-com bubble burst, helping spark more debate about history repeating itself.
Back in the late 1990s, the internet was going to change everything. And it largely did, but the path to transformation wasn’t a straight line. Initially, companies were rewarded for vision rather than viability. Venture capitalists opened the fire hose, investors piled into tech stocks and valuations soared not because of profits (or even revenue) but because of potential. It seemed like all a company needed was a website, a vague idea of how to make money and a name that ended in “.com.” Remember Pets.com with its sock puppet mascot? A company called Webvan.com promised grocery delivery before the logistics even remotely existed to support it.
Cisco sat at the heart of the frenzy, selling the routers and switches that powered the internet’s backbone. At its peak, it became the most valuable company in the world. Many analysts dismissed Amazon, still mostly an online bookseller, as a cash-burning experiment. Google was still largely flying under the radar. But the hype collapsed under its own weight, and the market fever broke. In 2002, Nasdaq hit a low that shed nearly 80% of its all-time high. Companies without real infrastructure folded, and even survivors like Cisco saw their valuations plunge as reality caught up to exuberance. But amid the wreckage, the real internet economy began to take shape.
Today, AI has taken up that mantle of transformative promise. Nvidia in particular has become the poster child of the AI wave with a stock run-up that recalls Cisco at its apex. Every week seems to bring a new advancement, and with capital flooding into unproven ventures with lofty expectations, the script feels familiar.
Yet unlike the dot-com boom, today’s AI ecosystem is built on far more mature technology and infrastructure. The companies leading the charge—OpenAI (backed by Microsoft), Alphabet, Amazon, Nvidia and Palantir—aren’t scrappy startups. They’re the tech establishment, flush with cash and hardened by past cycles. The cloud exists. Processing power is orders of magnitude stronger. And many applications—like AI-powered customer service or personalized recommendations—are already delivering real business results.
Still, implementation remains uneven, and the conversation around AI is more nuanced than the boisterous hype of 1999. Ethical questions, job displacement and regulatory scrutiny have been part of the equation from day one. Will another bubble burst, or will experience and a more sober review of risk provide some safeguards? No matter what, history suggests a shakeout is looming and, just like 25 years ago, the companies that emerge strongest may not be who we expect (or even on our radar yet).
We’re in the early innings. While there are parallels to the dot-com era, there are also important differences. So, before the sayings become obsolete, there are my two cents and a penny for your thoughts.