Tech guru Erik Gordon says investors will 'suffer' far more from the AI boom than the dot-com crash
Other investors have said tech stocks surging on AI bullishness will crash like dot-com companies in the early 2000s, but some, such as Kevin O'Leary, have dismissed the comparison.
Gordon contrasted the market values of Pets.com, the online pet-supplies retailer that became what he called the "poster bozo" of dot-com mania, and CoreWeave, an AI infrastructure startup that went public in March.
Nvidia-backed CoreWeave's shares have fallen 30% over the past two days, wiping about $23 billion from its market cap, showing how "more investors will suffer than suffered in the dot-com crash, and their suffering will be more painful" in a bursting AI bubble, Gordon said. The fall came after its latest earnings showed widening losses and infrastructure constraints.
Pets.com, backed by Amazon and several renowned VC firms, secured a market value of $410 million at its peak in February 2000. But within the next 12 months, the company declared bankruptcy and said it would liquidate its assets, and its stock was delisted.
"If you assume all $410 million was lost, the loss was tiny compared to what we might see in AI," Gordon said.
CoreWeave shows how sudden and significant losses can be for shareholders, Gordon said. The loss to its market cap is about 56 times Pets.com's peak market cap. CoreWeave stock still closed at $105 a share on Wednesday, more than double its listing price of $40.
"It takes a hype-driven tech stock to instantly destroy $20 billion in wealth," Gordon said.
CoreWeave didn't immediately respond to a request for comment from Business Insider. CEO Michael Intrator said in a statement accompanying the earnings that they showed "continued momentum across every dimension of our business."
The collapse of the dot-com bubble saw the S&P, including dividends, drop by around 9% in 2000, 12% in 2001, then 22% in 2002. Scores of startups filed for bankruptcy, and thousands of tech workers lost their jobs.
Tech titans make up a large chunk of the US stock market's value, and their profits and market dominance have made them mainstays of retirement portfolios and pension funds.
In 2022, Gordon told Business Insider that more people were invested in AI than in dot-com companies 25 years ago. He predicted there would be " more bowls of spaghetti" after the AI boom burst, as people who got burned by the slump would cook at home to save money and cut costs wherever possible.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Forbes
2 minutes ago
- Forbes
When The Bear Appears: Why You Need To Become An AI Movement Leader Now
Across America, the warning signs are no longer whispers. They're sirens. Automation and AI are poised to wipe out 30 to 50 percent of job roles in the coming years. The bear is out of the woods. And here's the brutal truth: you don't have to outrun the bear. You just have to outrun the other campers. Whether you're a call-center rep in Salt Lake City or a mid-level manager in Minneapolis, your job as it stands today might not exist tomorrow. But that doesn't mean you have to wait for the pink slip. You can become a movement leader for the age of AI. No title or permission required. Step One: Rewire Your Role AI isn't just for engineers. It's in your browser, your inbox, your workflow. Learn it, use it, teach it. Automate part of your job and coach others to do the same. You don't need a boss's blessing to be the one who spreads smart tools. This week, take one repetitive task and hand it off to an AI tool. Then offer to mentor a few coworkers to do the same. Share wins. Step Two: Reinvent It Entirely Once you've chipped away at your task list, zoom out. Ask yourself: If I were designing this job from scratch, with AI as my teammate, what would it look like? Then start sketching that future. Be ruthless. Be visionary. Map your current work activities. Then redesign them with AI integrated at every step. Share this with your manager. If they shrug, share it higher. The bold often find their way to new rooms. Step Three: Don't Go It Alone The biggest gains come when innovators reimagine together. Pull in a few peers you admire for their curiosity from neighboring teams. Show them your role and work redesign. Invite them to co-create the next bigger version of how all your work together could be reimagined. Some may be fearful for engineering themselves out of a job, its now your turn to convince them that their best job defense is to be a proactive and curious innovator. Point out that if you all don't come up with this someone else will and you will then be victims of the change instead of heroes of invention that the company and companies in general can always use in a number of places. And, recognize and state clearly that you are now a team doing this together and the entire team will get the credit for thinking bigger. Commit to having each other's backs! Book a 30-minute session next week with three colleagues. Pick one shared process and rebuild it together. Make it faster and better. Find those in leadership who appreciate such innovation and invite them along to learn with you as you progress. You are now building a brand for being innovators. This is what radical adaptability looks like. It's how people future-proof not just their jobs, but their professional brands and career value. Companies are desperate for internal changemakers, don't make it difficult for the leadership in your organization to find you and your curious proactive peers already rebuilding the future of work from the inside. Why Now AI isn't just coming for the boring stuff. It's targeting strategy, creativity, even leadership. The org charts of tomorrow will be flatter, leaner, and more fluid. Those who survive won't be the ones who did what they were told. They'll be the ones who led the way without being asked. This is your moment. Lace up your sprinting shoes. Reinvent your role so thoroughly that your old job becomes obsolete. Then, take the reins to build what comes next with a group you will enjoy inventing with. Design new roles, new processes, and new ways of creating value that didn't exist before. Be inclusive and generous in order to bring others along. Even if your company doesn't immediately see your value, they will if you get results, and surely another company will love to hear you share your story and put your ingenuity to work. The bear is here. Are you going to freeze? Or sprint?
Yahoo
30 minutes ago
- Yahoo
How to pick the best long-term investment for your future
It's a photo-finish race to become the new, best long-term investment. What will come out on top? On this week's Financial Freestyle, host Ross Mac speaks with Kid Parchariyanon, founder and managing partner of SeaX Ventures. Kid discusses how SeaX is helping companies develop transformative technologies, and makes his prediction for the best long-term investment between crypto, AI, and biotechnology. For a deep dive on how venture capital is shaping the future of technology, check out this week's episode of Financial Freestyle. Listen and subscribe to Financial Freestyle on Apple Podcasts, Spotify, or wherever you find your favorite podcasts. Financial Freestyle with Ross Mac on Yahoo Finance is dedicated to promoting economic prosperity for all. Through expert insights, practical advice, and inspiring success stories, we empower you to build and grow wealth. Join us on this transformative journey toward financial freedom and inclusive economic growth. Related videos Mortgage broker reveals $112,000 home loan mistake: 'Costing you a bomb' ATO $2,548 tax refund cash boost for 2.6 million Aussies Work from home shift for millions of Aussies as 'clear link' with salaries revealed: '$300,000 or more' ATO superannuation warning for 200,000 Aussies ahead of looming deadline: 'On the hook for penalties' Sign in to access your portfolio
Yahoo
30 minutes ago
- Yahoo
Dear Marvell Stock Fans, Mark Your Calendars for August 28
While Nvidia (NVDA) may hog the artificial intelligence (AI) spotlight, Marvell Technology (MRVL) has been quietly scripting its own chapter in the semiconductor boom. The Wilmington-based chipmaker builds the backbone of our digital age, designing semiconductors that power everything from hyperscale data centers to 5G networks and advanced automotive systems. The year began with fireworks, as Marvell delivered record revenue and earnings in Q1, propelled by AI's insatiable appetite and Marvell's surging custom silicon business. Now, all eyes are on Aug. 28, when the infrastructure semiconductor solutions leader unveils its Q2 results. Management is projecting robust growth, with investors eager for updates on AI momentum, new product rollouts, and market expansion plans. More News from Barchart UnitedHealth Stock Soars as Warren Buffett's Berkshire Hathaway Discloses $1.57B Stake Palantir CEO Alex Karp Sees More Gains Ahead With America-Focused Growth Strategy, Calls U.S. The 'Leader of the Free World' Lucid Motors Is Caught in a Tariff Trap. Is LCID Stock More Likely to Hit $1 or $7 in 2025? Get exclusive insights with the FREE Barchart Brief newsletter. Subscribe now for quick, incisive midday market analysis you won't find anywhere else. Though MRVL stock sits nearly 40% below its 52-week high of $127.48, its 21% rally over the past three months signals that momentum is building, and Aug. 28 could mark another defining chapter in Marvell's climb. About Marvell Stock Marvell, founded in 1995, set out to accelerate how the world moves and processes data. This Delaware-based company, valued at $67.2 billion by market capitalization, designs semiconductor solutions that reach from the heart of the data center to the farthest edge of the network. Today, with AI demand surging, Marvell's technology powers high-speed networking, advanced storage, and 5G connectivity, quietly driving the backbone of our digital world. Marvell's shares have been on a roller coaster worthy of Wall Street's highlight reel. Over the past 52 weeks, MRVL stock climbed 23.8%, peaking at $127.48 earlier this year before tumbling to a bruising year-to-date (YTD) low of $47.08 in April. Down 28.2% in 2025, the chipmaker became a short-seller's darling, until momentum flipped. Over the past three months, MRVL has surged 21.2%, up 9.1% in the last month alone, and now sits nearly 70% above its lows. Meanwhile, the 14-day RSI is just above 60, signaling healthy buying interest. This rebound is not just technical – bullish management guidance, upbeat analyst calls, and Marvell's ambitious goal of seizing 20% of the custom AI chip market by 2028 are fueling the rally. Marvell's pullback in 2025 has opened a rare lane in the crowded chip space. Priced at approximately 36 times forward price-to-earnings (P/E) ratio and 11.58 times sales - well below its historical averages - this AI-driven chipmaker is priced like it is on clearance, despite heavyweight growth prospects. Fueled by booming demand in custom chips, high-speed memory, and optical tech, Marvell's data center momentum and hyperscaler alliances make its valuation look primed for takeoff. A Closer Look at Marvell's Mixed Q1 Earnings Report Marvell's fiscal 2026 Q1 earnings results, released on May 29, was the kind of report that keeps investors leaning forward in their seats. The chipmaker's top and bottom lines beat Wall Street's projections, with revenue surging 63% year over year (YoY) to $1.9 billion, well above its own guidance midpoint. Adjusted EPS came in at $0.62, rocketing 158% annually. The primary growth driver was the Data Center segment, which generated $1.44 billion, 76% of total revenue, reflecting a 76% annual increase and 5% sequential growth. This momentum was fueled by high-volume production of custom AI silicon programs and strong electro-optics shipments supporting AI and cloud infrastructure. Enterprise Networking and Carrier Infrastructure each advanced 14% sequentially, continuing their post-pandemic recovery. However, other areas softened. Consumer revenue declined 29% sequentially, though management anticipates a 50% rebound in Q2, supported by seasonal gaming demand. Automotive and industrial revenue fell 12% sequentially, with a flat outlook for Q2. The balance sheet is looking healthy, with Marvell ending Q1 with $885.9 million in cash and cash equivalents and a conservative debt-to-equity ratio of 0.3x. Shareholder returns remained a priority, with $52 million paid in dividends and a sharp increase in stock buybacks to $340 million, up from $200 million in the prior quarter. AI All the Way Building on its strong Q1 results, Marvell is doubling down on its AI-led growth strategy. CEO Matt Murphy says AI now drives most of its data center revenue, with bigger gains ahead. As part of a broader strategic realignment, Marvell is selling its Automotive Ethernet business to Infineon ( for $2.5 billion, the deal is expected to close later this year. On the innovation side, Marvell bolstered its custom silicon platform through a new collaboration with Nvidia, integrating NVLink Fusion into its XPU roadmap to enable more scalable AI architectures. It also rolled out a multi-die packaging platform, already in production, using its interposer technology for faster, cheaper system designs. CEO Murphy sees Marvell at the heart of the custom AI infrastructure boom, with its silicon business set to fuel growth in Q2 and beyond. While the company is all set for the Q2 report on Aug. 28, after the bell, the management expects $2 billion in revenue (plus or minus 5%), up 57% YoY, fueled by AI momentum, expanded custom silicon programs, and stronger networking infrastructure. Additionally, adjusted EPS is estimated to land somewhere around $0.67 (plus or minus $0.05) per share, more than doubling last year's figure. Analysts tracking Marvell anticipate its Q2 revenue to rise to $2 billion, with adjusted EPS rising 325% YoY to $0.51. Looking further ahead, fiscal 2026 EPS is anticipated to surge by 133.7% YoY to $2.15, before rising by another 31.6% annually to $2.83 in fiscal 2027. What Do Analysts Expect for Marvell Stock? Analysts maintain a decidedly favorable view of this chip stock, assigning it an overall 'Strong Buy' rating. Of the 32 analysts covering the stock, 24 recommend a 'Strong Buy,' two stick to a 'Moderate Buy,' and the remaining six are staying on the sidelines with a 'Hold' rating. MRVL stock's mean price target of $92.17 hints at a 16.2% upside potential from where it's trading now. The Street-high target of $149 implies the stock could rally as much as 87.8%. On the date of publication, Sristi Suman Jayaswal did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
