Stock Talk - It’s an AI Bubble! (So Why Are Many Investors Cautious?) Stock Talk Update, Friday April 24, 2026

Episode Date: April 24, 2026

Join me as I ask whether today’s AI investment cycle is truly an “obvious bubble” like the Dot-Com era, or whether the real story is more nuanced. I compare the stall-and-surge period of 1999–2000 with today’s AI acceleration into 2026, focusing on capex spending, the rise of agentic AI, market returns, valuations, and where risk is showing up. While today’s market has echoes of 1999, I explain why the foundation looks stronger this time: AI demand is already real, many leaders are profitable, and much of the speculative risk remains concentrated in private markets rather than public equities. Still, risks are rising as we potentially exit the “7th inning stretch,” so I believe investors should stay disciplined, diversified, and focused on real earnings, real demand, and long-term planning, not just excitement around the next big technology trend.   About Chris Perras, CFA®, CLU®, ChFC®, Chief Investment Officer: As CIO, Chris is the lead investment strategist and director of research at Oak Harvest Financial Group. Chris develops the firm's core market outlook, putting his decades of experience and expertise to work for our clients. He hosts Oak Harvest's podcast, "Stock Talk," available on the website with new episodes each week. He completed his undergraduate studies at Georgia Tech, and went on to obtain an MBA from the Harvard Business School. Driven by a desire to maximize his knowledge and skill set, he acquired financial planning and investment management qualifications, becoming a Chartered Life Underwriter (CLU®), a Chartered Financial Consultant (ChFC®), and a Chartered Financial Analyst (CFA®).   Stock Talk is a weekly vlog/podcast dedicated to discussing the Oak Harvest Financial Group Investment Team's perspective on what's happening in the market. Hosted by Chief Investment Officer Chris Perras, each episode brings you our views on stocks, the market, and the economy with a little education thrown in for good measure. Listen each week and help stay connected to your money!   Do you need a retirement plan that goes beyond allocating funds to truly fit your needs? We can help you create a retirement life plan customized for your retirement vision and legacy. Call us at 877-896-0040 or fill out this form for a free visit: https://click2retire.com/lets-connect   Important disclosures: Content of Oak Harvest podcasts expresses the views of the speaker and is for informational purposes only. Oak Harvest believes that any data, articles, or information cited are reliable at the time of creation, but does not warrant any information contained herein to be correct, complete, accurate, or timely. References to third-party analysts should not be seen as an endorsement of their views or recommendations, and you should do your own research before investing. The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast constitutes personalized investment, tax or legal advice, or an offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Any specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss, and past performance is not indicative of future results.

Okay, investors, this week, we're going back to a topic we've talked about for the past year. It's an AI bubble. You've been watching many financial media outlets the last few years, you've been hearing that declaration, an opinion often stated as fact. Investment team of Oak Carvers has been asked this question from well over 18 months now, are we reliving the dot-com capex boom, internet, and mobile phone buildout of 1997 through 2000, in the AI investment cycle that started late 2023 with the release of Tet GPT, or is this something new and different?

But here's the question I've asked for over a year. If it's such an obvious bubble and so many pros are so good at spotting bubbles in advance, why are so many in the public markets, equity professionals, still cautious? I mean, why aren't they all in like 1999? That disconnect is where the story really lies. We compare the dot-com stall in the summer of 1999, then the surge in 2000, today's AI acceleration, end to 2026.

Think of both is a seventh inning stretch. Business momentum was strong, but the stock markets paused for four to six months before re-accelerating up. So looking at the CAP-X comparison, in 1999, companies were racing to build the Internet. Back then, it was fiber networks, telco infrastructure, and eventually the mobile Internet. Massive capacity was being built, but it was ahead of real demand. It was ahead of Amazon, it was ahead of Netflix, and ahead of streaming services, and ahead of most mobile telephone applications we use today. That summer, mid-1999, was the seventh inning stretch. The real excess in public equity markets came after that.

It came in the six months during the fourth quarter, 1999, into late March, first quarter 2000, as the spending plowed ahead of end demand. Many ways, today does look eerily similar to that period in late 1999, but it's fundamentally different. You know three years into AI spending, three years from the launch of GPT, November 30th, 2022, and usage is exploding from already high level and high growth rates. It's an acceleration driven by real existing usage and demand for a compute. For systems driven by VIDIA and other semiconductor chips, today end demand is exploding exponentially thanks to Oakland Source AI programs and agentic agents coming on the scene early February of this year with Oakwood Claw.

What changed in the first quarter of this year that many investors didn't see until just now, just as we exit the seventh inning stretch, that parabolic AI check growth in 2023 to 2025 has recently went exponential in the first quarter of this year. This was a tipping point beyond the bi-coding moment last year in 2025. AI is no longer just a tool. It's becoming agetic. So what does that mean? AI is now agentic acting, deciding, executing.

Systems that act on their own. They run queries, they make decisions, they give suggestions, and they execute tasks automatically 24 hours a day, seven days a week, every day of the year, if needed. That drives real end demand and revenue. It's not build it in hope, but rather build it because current capacity is already overloaded and strained. This drives the price.

that compute up and GPU values up as well, not down, as Michael Burry had postulated in his short thesis about six months ago. So investors, what's kind of different in this cycle? It's private versus public market capital. Now, this is an important difference in one many investors mess. In 1999 capital flowed through public markets. IPO surged, speculation spread quickly, and retail investors carried much of the risk. In 2006, the most important AI companies are still private. Open AI, Anthropic, Bite Dance in China, SpaceX, and another area of tech. Funding comes from large institutions, strategic partners, and other big tech platforms, not from retail investors, Oregon Stanley, or Goldman Sachs. So this structure is different. Back in 1999, the risk was largely

public. We had an IPO boom and public speculation ran rampant. Today, Open AI and Anthropic are still private. Much of the risk is still privately ill. That doesn't remove risk, but it change is where it sits. Risk currently is more contained. So looking at the returns, let's cover the returns during the two time periods. Here's a table of the S&P of 100, NASDAQ, and the SOX indexes from long-term capital low in 1998 in October into the end of dot com.com 18 months later. dot com s and p up 52% then nasdaq up 184% and the semiconductor socks index up a whopping 478%. And here's the 13 month period from the same time period from the low to where we stand today almost 13 months out. Back then the s&P was up 41%. The NASDAQ up 112 and the socks had

doubled and up 224%. So if we follow our recent 12 and a half month returns since the tariff tantrum lows last April, what do the returns look like? Kind of similar. S&P 500 up 42.8%, NASDAQ up 60%, a lot less than the dot com, and the socks up 176%. In 1999, everything in the NASDAQ melted up. Free revenue companies, eyeball companies, click companies, anything with a sniff of dot com in its name. Today, the markets are a bit more selective. They're strong, but software stocks have lagged for 12 months, as have many of the Mag 7 prior leaders. The strength is largely vending picks and shovels, as Charles likes to say, semiconductors, optics, and infrastructure builders.

What's the economic backdrop? Well, now what did the economy look back in 1999? Economic growth is strong. The Federal Reserve was actually tightening interest rates, but it was also creating a special liquidity and event, potential Y2K disruptions in 1999-2000. Today, growth is steady and possible, about to accelerate into the second through fourth quarter. Inflation was about to peak around 3.5% and got down, but we got hit by the Iran War, so right now, inflation is very unclear.

As far as the market's behavior, financial markets are concerned they do look familiar. In both periods, leadership was technology companies, but energy, material, infrastructure stocks also did very well. But here's a key distinction. In 1999 stock market bubble, many companies had no earnings, traded at multiples of revenue or eyeballs, and if they did have earnings, they traded it 50 to 100 times earnings. See the valuation of Cisco back in the day and compare it to Nvidia nowadays.

Many evaluations back then were based on hype and hope. Today, market leaders are highly profitable, generating real cash flow and seeing earnings re-accelerate with AI demand. Yes, I have to admit, many are now negative free cash flow given their huge cap expense and moving from asset light to more asset heavy. That is a major change and that is the risk. The risk today is not, no earnings. The risk is paying too much for very good current earnings and uncertain future earnings and marginal return on invested capital. So investors, let's assume we're in a similar bubble for the sake

of an argument. So where are we right now? A return to our much shared. SMP 500 overlay. Here's the updated chart, remember, no guarantees. Investors, we look to be exiting the seventh inning stretch where upside remains, although risks are rising. So investors, while this is not in 1999, we are rhyming a lot with it. The foundation of the AI-CAP-X cycle, profits, and existing demand is much stronger today, and valuations are much lower. That's a good thing, and begs the question, why so many have been calling bubbles for not just a few months, but for a number of years. While we are not early in an economic expansion, due to an agenetic tipping point, we have likely just entered and re-entered the re-acceleration phase, which should be good for many stocks.

Today, the structure of risk is different. 1999, it was public markets and widespread. Today, much of it remains in private markets and concentrated. Maybe the bubble is in private markets this cycle, not in public markets. Investors, we know history doesn't exactly repeat, but given humans, repeat many vast behaviors, and studying behavioral finance, it often rhymes. Right now, we continue to see echoes of 1999, but with a stronger foundation underneath,

and just exiting the seventh inning stretch. Stay disciplined, stay diversified, and focus on what's real, not what's just exciting. Whether a priority is growth, income, or a combination of both, or a team here at Oak Harvest is here to help you plan for your family's financial future no matter where you're at in your career or in your retirement charity. contained with an Oak Harvest podcast expresses the views of the speaker and is for informational purposes only. It is based on information believed to be reliable when created, but any cited data, indicators, statistics, or other sources are not guaranteed.

The views and opinions expressed herein may change without notice. Strategies and ideas discussed may not be right for you, and nothing in this podcast should be considered as personalized investment, tax or legal advice, or an opportunity. offer or solicitation to buy or sell securities. Indexes such as the S&P 500 are not available for direct investment and your investment results may differ when compared to an index. Specific portfolio actions or strategies discussed will not apply to all client portfolios. Investing involves the risk of loss and past performance is not indicative of future results.