Investors worried about another dot-com crash may be asking the wrong question.
Jim Cramer argues that pockets of speculation do not make the entire stock market a bubble
Compared with the late 1990s, many of the companies leading the current rally generate substantial revenue, earnings, and cash flow. And that distinction matters. Not only promises but also profits for Wall Street’s biggest banks, Micron Technology (MU) and Nvidia (NVDA).
The recent financial data reveal that AI expenditure, trading activity, and company investment are delivering tangible profits. But “not another 2000” doesn’t mean equities are safe from a nasty fall. The market’s main test will be whether corporate earnings can keep expanding fast enough to justify lofty valuations without the artificial intelligence investment boom causing enough inflationary pressure to keep interest rates elevated.