3 ms·
Most people (in the world) hadn't been on the internet in 2000 when the dot-com crash happened. Barely half the US population was even online at that point. W
by hylaride 2y ago
Most people (in the world) hadn't been on the internet in 2000 when the dot-com crash happened. Barely half the US population was even online at that point. We're probably nowhere near the peak of AI ability or usage, but that doesn't mean there hasn't been a lot of mal-investment or that things can't commodify.
Huge amounts internet growth still happened after the 2000 crash, but networking gear and fiber optic networking became a commodity play, meaning the ROI shifted. The companies that survived ended up piggybacking the over-investment on the cheap, including Amazon and Google.
Even going way back, the real productive growth of the American railroads didn't happen until after the panic of 1873 after overbuilding was rationalized.
- _ea1k 2y agoAgreed, and good reminder that a lot of people here have probably only learned about the dot-com crash from comments and history. I remember when Cisco had a P/E in the hundreds during that era. People have forgotten just how stratospheric some of those valuations were back then. I hate to say "this time is different", but it really doesn't feel the same way, at least in public equities. nvidia has a high stock price, but they also have a P/E of ~36. Meanwhile, modern Cisco is ~27. There might be some parallels though. OpenAI as modern Netscape might not be that far off.
- freejazz 2y agoYeah... the public equities.
- rchaud 2y agoCisco makes network equipment (selling shovels in a gold rush), so a high valuation at the time wasn't out of the ordinary, considering Cisco was actually profitable during the dotcom boom, when many newly public companies were 'pre-revenue'. I think of it as similar to Nvidia, who also sells shovels.