The big black candlestick of PLTR dropped 9% on Wednesday and made NSADAQ had a retreat and also the Philadelphia semiconductor index had a great drop because of the major IT and AI stocks retreated. Since the rise from the bottom of April 7th till August is the steepest slope ever in history. People afraid the dot com bubble will come again as AI bubble. Therefore I asked the Microsoft AI to make a comparison of the dot com bubble of the 1999 and the AI trend of 2025.
First of all, on Wednesday DJIA was still rising, S&P dropped slightly and NASDAQ dropped greatly. This means non-IT stocks are still rising. Please refer to the annual gains of S&P on page one, in the dot com bubble of 1999, S&P had 5 consecutive years had a gain of over 20% and out of which 2 years were over 30%. This time only 2023 and 2024 were over 20%, 2025 may be quite near but not yet confirmed to be over 20%. The major difference is that in the late 1990s they need to train a lot of computer user to take up the jobs and now AI can replace a lot of jobs but in case of efficiency it is much higher now.
In the 1990s, those IT companies are not matured enough while now the semiconductor is known as petroleum of the century. At that time a lot of companies just possess some concept but now companies like NVDA and MSFT had already surpassed the 4 Trillion level of capitalization and NVDA is expected to reach 5, 6, and 7 Trillion level in the leading position.
One thing the AI had not shown because I had not told it to do so. Please compare with the interest rate table of yesterday and will know that dot com bubble was in the period of rising interest rate and now we are in cutting interest rate. Anyway, the speech of Powell Jeromy on will be quite decisive. Normally, his speech is just of 20-30 minutes, but sometimes he would put the focus in the beginning and sometimes at the end. We don’t know what style he would chose this time.
Another thing AI had not do, because I had not asked them. The price of gold in 1999 was US$250, and now US$3340, which means the value of money is quite different. USD Index was at 120 and now 98.17.
The greatest difference is that we are having the Artemis project of landing on Mars at 2030 or may be 2029. The Apollo Moon landing project was the greatest project ever on earth, not only bloomed the US economy but also world economy for their competitor Soviet Union was in operation too, and now China is in competition with US and this time the project scale will be even larger for the Moon is used as a base for Mars landing. The AI would not talk about this only if you ask them to do so, and that’s why we need the super-AI which is AGI and AGIC.
I have already said in early August I had re-organized the position and took some profit and all lock them up and would not change even if turmoil comes. For the market will not go up straight and also will not fall straightly. There was a very attractive golden pit with a bottom on April 7th, so when it drops greatly will attract people to buy in the golden pit. Actually people are waiting for such a golden pit for the price of hot stocks like NVDA, TEM and PLTR are really too high, but TSLA and AAPL are really in hibernation, or half awakening and half sleeping, even in the fall is like that.
In the beginning of this year, I had already said there is a buying period of 6 months from March to August and in early August I locked up all positions and went into observation period.
Conclusion is that Microsoft AI forecasted that end of 2025 S&P may reach 6400 to 6800 by the end of 2025. My forecast is as before which is 6600 to 6700. If you look good upon S&P can buy the ETF of SPY or VOO, the management fee of VOO is much cheaper than SPY. If you want AI to tell you more, you have to ask more at first or until super-AI comes into existence that they can know what is inside your heart but not now.
Keep on watching and I will ask the AI to talk about more individual stocks in the next few days, actually future market trend depends on the speech of Powell in Jackson Hole.