Happy Jackson Hole day, investors. Jerome Powell is set to speak at 10 AM this morning and I’ll be tuning in alongside the niche world of Fed-obsessed markets folks. For a primer on monetary policy, you can revisit Thursday’s newsletter, which unpacks the bull and bear case for a September rate cut.

As for this morning, we’re putting the dot-com and AI comparisons to rest.

Investors keep wondering whether AI is another dot-com crash waiting to happen.

The comparisons reached a crescendo over the last week as OpenAI CEO Sam Altman said investors are “overexcited” about the new technology while Meta — OpenAI’s biggest rival for engineering talent — froze hiring in its AI division. 

Nonetheless, the dot-com discussion falls flat once you account for the one company that’s driven almost the entire AI wave. 

Nvidia has surged 1,143% since ChatGPT launched in late 2022, providing shareholders with returns beyond any of the internet leaders of the 1990s.

Back then, investors picked from a roster of winners — Cisco, Intel, Microsoft, and Oracle — which all returned less than 500% in the first two and a half years of the boom.

“This dramatic difference shows the acute scarcity of public gen AI plays, with Nvidia capturing the early economics of AI far better than the numerous public internet plays in the 90s,” said DataTrek Research co-founders Nicholas Colas and Jessica Rabe. 

To be fair, the comparisons remain uncanny at an index level.

The Nasdaq Composite has gained 106% since its December 2022 low, nearly identical to the 111% it posted in the same stretch starting in 1995. 

As Colas and Rabe illustrate with the chart below, it’s easy to make bearish generalizations about the two eras.

Still, Nvidia’s leadership today is far more critical than any of the handful of buzzy internet stocks. 

Its dominance has left investors still willing to pile into Nvidia even as it trades at 35x forward earnings.

Lofty as its valuation may appear, the chipmaker is underpinned by its indispensable products and ties to trillion-dollar hyperscalers. 

“NVDA does have the dual advantages of a much stronger/more profitable customer base,” Colas and Rabe said.

The internet boom, by contrast, was largely juiced by companies burning cash to gain eyeballs. 

None of this is to say Nvidia (or the broader AI trade) is without risk.

ChatGPT creator Altman said as much just days ago.

History suggests the Magnificent Seven as a group remain stretched to uncomfortable levels, and that the exuberance is due for a pullback. 

Nvidia alone is now worth 3.6% of global GDP.

The nuance here is that the dot-com bubble was defined by abundance — too many companies, too much capital, and too many competing investment ideas. 

Meanwhile AI, at least so far, offers a story of scarcity built almost entirely on a single company.

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📉 Employers will keep slowing hiring. Twice as many employers as a year ago say they plan to pull back on filling jobs, a new Conference Board survey showed. Economic uncertainty and AI adoption are making businesses more hesitant to grow headcount. (WSJ)

🐂 The bull and bear case for Fed rate cuts. Jerome Powell speaks at 10 AM in Jackson Hole today, but market watchers remain torn on whether the central bank should lower policy. We broke down the pros and cons for each policy path. (Opening Bell Daily)

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📰 I’m Phil Rosen, co-founder and editor-in-chief of Opening Bell Daily. I’ve published books, lived on three continents, and won awards for my journalism, which has appeared in Business Insider, Fortune, Yahoo Finance, Bloomberg and Inc. Magazine.

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