The Realities of Today’s AI Market: A Far Cry from 2000
It’s natural, after a standout year for Riggs clients, to wonder if the recent market sell-off marks the start of a deeper downturn. But the Riggs team remains confident: both the economic data and corporate earnings paint a picture of ongoing strength, not vulnerability.
Concerns about an “AI bubble” are rampant, but today’s market is nothing like the late 1990s or the Y2K pull-forward. Twenty-five years ago, businesses and consumers rushed to upgrade every piece of technology ahead of January 1, 2000, and once the clock turned, tech spending dropped abruptly—ushering in a recession as demand evaporated. Today’s landscape is decisively different: AI adoption is driving ongoing, accelerating investment, not a short-term surge.
Unlike Y2K, when demand dried up after systems were “fixed,” corporations and governments are investing in AI for immediate, measurable productivity gains. Spending is rising each quarter, and earnings data confirm this trend is broad and durable.
So while the mainstream media keeps running news stories on the “AI bubble,” leading experts echo Riggs’ view that today’s market is fundamentally healthy and forward-looking:
Beth Kindig, IO Fund: "AI infrastructure is driving a capex boom rooted in real demand from businesses and governments—not speculation."
Mohamed El-Erian, Allianz: Calls today’s wave a “rational bubble,” where investment is justified by transformative productivity, not simply enthusiasm.
Tom Lee, Fundstrat: Points out, “Every major sale of AI hardware produces tangible value and business outcomes—this isn’t 1999.”
Dan Ives, Wedbush: Describes AI as the “Fourth Industrial Revolution,” expecting sustained strong market leadership as the spending surge continues worldwide.
Ray Dalio, Bridgewater: Advises, “Don’t exit quality positions too soon—signs of bubble risk can persist, but true breakthroughs underpin lasting gains.”
JP Morgan: Highlights a “new frontier” in investing, driven by AI, fragmented supply chains, and strategic inflation—all of which reinforce corporate leaders’ confidence and continued investment.
Each of these voices supports Riggs’ own research and client experience: AI isn’t just hype—it’s delivering genuine business outcomes, and the steady rise in corporate and government spending sets this cycle apart from the abrupt pull-forward of Y2K. Today, investment is ongoing, broadly spread, and anchored in meaningful productivity improvements.
Looking at the Numbers
Even as tech stocks like Nvidia continue to lead innovation, their current price-to-earnings ratios remain comparable to—or lower than—mainstream giants like Walmart and Costco. In other words, profits are keeping pace with investment, and the market is rewarding real earnings production, not runaway multiples.
The recent volatility has raised anxiety among high-net-worth investors, especially after such a strong year. But at Riggs, the approach is always evidence-based. There is no sign of an imminent downturn in either the hard data or company earnings calls. Instead, we see the market’s reset as a healthy adjustment, creating opportunity for disciplined, long-term investors.
Our Thanksgiving Message
As we gather with loved ones this holiday, the Riggs team reflects on gratitude—for your trust, for partnership, and for the privilege of guiding your wealth journey. Thank you for allowing us to help you achieve your financial goals in a year full of change and progress.
We wish you and your family a peaceful, joyful Thanksgiving. Though our team will spend the holiday with their families, Bob Jr. and Liz will be available for urgent client needs.
Happy Thanksgiving from all of us at Riggs Asset Management!