You are correct that the overall economic backdrop is quite different from the late 90s.
Nonetheless, the AI news cycle is continuous (like .COM was) and the attribution of NVDA's +25% romp to the prospects of AI grabs the attention of retail investors, who tuned in to see AVGO +20% and the likes of MSFT, TSLA, NFLX and GOOG add 5% in 2 days. The longer that goes on, the more we'll see investors looking for reasons that companies will benefit from AI and want to buy in, then, companies that don't have a strong AI story will need to get on the train and start buying all the AI startups that have materialized over the last couple of years. Then, we start seeting AI IPOs with increasingly sketchy histories. (sorry, .COM PTSD kicking in...)
All this could happen in a weak market. In fact, strong returns in AI during a weak overall market will simply call more attention to it.
Nonetheless, the AI news cycle is continuous (like .COM was) and the attribution of NVDA's +25% romp to the prospects of AI grabs the attention of retail investors, who tuned in to see AVGO +20% and the likes of MSFT, TSLA, NFLX and GOOG add 5% in 2 days. The longer that goes on, the more we'll see investors looking for reasons that companies will benefit from AI and want to buy in, then, companies that don't have a strong AI story will need to get on the train and start buying all the AI startups that have materialized over the last couple of years. Then, we start seeting AI IPOs with increasingly sketchy histories. (sorry, .COM PTSD kicking in...)
All this could happen in a weak market. In fact, strong returns in AI during a weak overall market will simply call more attention to it.