Swisscanto week graphic. Microsoft, Nvidia or Google today display massive profits, far from the dotcom from 1999. But some values show bubble signs.
The surge of technological values recalls in certain aspects the 1999 bubble. But the fundamentals of tech giants are currently drawing a completely different landscape.
At the end of the 1990s, the scholarship ignited for companies without profits or viable economic model. Webvan, theglobe.com or Pets.com embodied an era when the idea was sometimes worth more than the results. The burst of the bubble brutally corrected these excesses.
Today, companies like Microsoft, Google or Nvidia dominate the market with solid results. Microsoft, for example, has seen its benefit by action (BPA) follow the growth of its course since 2015, supported by the rise of the cloud and the recurrence of income. NVIDIA, carried by the explosion of demand in AI, saw its profits fly away, transforming a technological success story into a prominent stock market engine. As for Google, its profitability remains one of the highest in the S&P 500, driven by advertising and the cloud. These giants generate cash, pay dividends and invest in innovation. Far from the 1999 situation, where the valuation preceded the business model.
But this solidity should not hide certain exuberance signals. Market segments – especially on technological small caps or certain AI values – display multiple that is difficult to justify. The comparison with 1999 is not completely meaningless: the bubble rarely forms at the heart of leaders, but on the periphery.
The discipline therefore remains in order: the figures speak for tech giants, but generalized optimism can still cause overheating pockets.
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