The guitar-slinging legend Carlos Santana went mainstream in the summer of ’99 with a little help from Matchbox Twenty’s Rob Thomas. “Smooth,” off Santana’s Supernatural, hit Billboard #1 by October. The track is our SOTW as we stroll down memory lane to the dot-com era. Recent hot takes calling today’s market “1999 all over again” sparked this note. Our view: this is not the end of the AI revolution - it’s the start.
Man, it’s a hot one…
Like seven inches from the midday sun…
Well, I hear you whisper, and the words melt everyone
But you stay so cool
Lately it feels like an epidemic of “bubble” and “recession” calls. Click-bait skews negative, and we’ve been on “bubble watch” for decades. There will be drawdowns - there always are. In 2022, the Nasdaq dropped roughly 50%. In 2025, markets digested a “DeepSeek moment” and an April tariff shock (“Liberation Day”). Yet innovation cycles don’t end because headlines get loud.
So, is this 1999 - and should investors fear a 50%+ collapse? Big falls typically pair with recessions. The better near-term question: Are we staring at a >20% decline in the next 3–6 months? Let’s turn to the data.
IPO Heat:
Tech index surge:
Rates backdrop (10-yr UST):
Fed stance:
Valuations are elevated in parts of AI, but the macro scaffolding is different from 1999: fewer IPOs, a far smaller tech blow-off, lower long rates, and a Fed now easing (vs. tightening into a frenzy). The tape will wobble - trade policy headlines alone have created 2–4% daily swings this month - but the setup isn’t the same powder keg.
This is not the end of the AI revolution; it’s the beginning of a multi-year investment cycle. The market will correct from time to time, but the setup lacks the hallmarks of 1999’s blow-off. The only thing truly ’90s about this moment is the song - because it’s still so smooth.
As someone that was in the thick of the madness on Wall Street and then San Franciso in the nineties - take it from me - this is not 1999 - yet.
Lear Investment Management (“LIM”) is a Registered Investment Advisor based in Dallas, Texas and registered with the Securities and Exchange Commission. Registration does not imply a certain level of skills or training. This content is an example of past analysis performed by LIM, is for informational purposes only, contains the observations and opinions of LIM, is not intended to provide investment advice, and should not be relied upon for investment decisions. Past performance is no guarantee of future results and information pertaining to LIM’s processes is subject to change at any time without notice.
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