The current rally has been driven by AI, but this isn’t the first time we’ve seen this story…
I think a lot about how market patterns repeat themselves. And honestly, what's happening now reminds me a lot of summer 1998.
Back then, Wall Street was cruising on the dot-com boom when things went haywire. In just six weeks, the S&P dropped almost 20%. Russia defaulted, Long Term Capital Management collapsed, and everyone panicked. Traders who'd gotten comfortable watching tech stocks climb just saw their gains disappear overnight.
But by October? The selloff was over. What came next was actually one of the strongest rallies ever. That brutal '98 drop wasn't the end of the bull market, it was just a nasty shakeout before the final push into early 2000. Markets were already stretched, but they still had room to run.
Feels kinda similar to now.
Last week, Alphabet released Gemini 3 Pro and it's a pretty big deal. Instead of the GPUs everyone's been talking about, it uses TPUs, tensor processing units. They're specialized chips that can only do AI math, but that makes them incredibly fast and energy efficient.
The performance improvements over the previous version were huge. And it shows AI still has plenty of room to grow as long as the chips and algorithms keep getting better.
So yeah, we might be in a '98 situation. Market looks stretched, there's been some shakiness, but the underlying tech story is still solid. Of course, nobody knows for sure, but the parallels are interesting.
What do you think? Are we setting up for another run higher or is it different this time?