What Comes After the 'AI Euphoria'

AI is following the same dangerous pattern we've seen before...

From the steam engine to semiconductors, almost every tech revolution follows a similar arc.

First comes the "installation phase." This is where massive investment floods into a new technology. Investors are giddy. They throw their cash at everything having to do with the latest tech. There's euphoria, overconfidence, and lots of speculative capital.

But most of these early bets are based on hype, not utility. And in the end, the market always crashes.

We saw this during the dot-com boom. In 1999, Internet stocks were minting millionaires.

Investors poured billions into anything with a ".com" in the name. The Nasdaq Composite Index doubled in a year. Just months later, most were wiped out. More than $5 trillion in market value vanished.

A telecom company called Global Crossing climbed to a $47 billion valuation by 2000... then it went bankrupt less than two years later.

Another one called Chemdex.com reached a $7 billion valuation... although it never booked more than $3.5 million in annual revenue.

But this wasn't the end of the Internet... it was just the end of the mania. Thousands of so-called Internet companies went bust. But the Internet didn't die. Instead, it entered the next phase... the deployment phase.

It matured. And the winners – companies like Amazon (AMZN) and Cisco (CSCO) – emerged stronger than ever.

Today, we're seeing the same signs with the next hot thing... AI.

The AI euphoria is here...

Microsoft (MSFT), Google (GOOGL), Meta Platforms (META), and Amazon are expected to spend a combined $750 billion on AI infrastructure between this year and next.

By 2029, total global AI spending could hit $3 trillion. That makes it one of the fastest capital build-outs in tech history.

Yet, a recent Massachusetts Institute of Technology survey of over 300 initiatives found that 95% of companies haven't seen a return from their AI investments. Most are still testing pilot programs... or building tools they don't yet know how to use.

Meanwhile, the biggest winners are already separating themselves from the pack. OpenAI's ChatGPT serves more than 700 million users a week. Nvidia's (NVDA) chips are sold out for months.

And companies like Nebius (NBIS) and Oracle (ORCL) announced record orders for AI infrastructure – ramping up their backlogs and sending their stocks soaring 54% and 43% the following day, respectively.

These aren't speculative plays. They're becoming essential infrastructure... just like broadband and cloud computing before them.

And when the dust settles, these are the types of companies you'll want to be holding.

After the crash comes the consolidation...

History shows us exactly how these stories end. Overinvestment triggers a crash. Weak companies fold. Capital flees the space. But the survivors take everything.

By 2004, Amazon's stock had recovered and gained more than 500%. Cisco became the backbone of global Internet traffic. Google had just gone public and changed the world of information forever.

We're headed for the same crossroads with AI.

The hype cycle will eventually pop. Companies with no business model will disappear. But those with scale, infrastructure, and proven demand will come out on top.

The key for investors is to stay in the market... and own the companies that already have their foot on the gas. Because at the end of the day, those leaders won't just survive... they'll dominate.

That's how wealth gets built during tech revolutions. Not by chasing the hype... but by holding the winners.

Regards,

Joel Litman
September 15, 2025

P.S. Even as I write this, some stocks are jumping like crazy. And yet, most investors are completely in the dark about the single anomaly linking these dramatic moves...

This Wednesday, September 17, at 8 p.m. Eastern time, I'm going "live" to share the most important moneymaking discovery of my career.

I haven't seen anyone else report on it yet... But if I'm right, this could be one of the most extraordinary periods for the market in decades. Click here for the details.