Seeking Alpha Analysts Compare AI Boom to Dot-Com Bubble
Seeking Alpha strategists warn that AI vendor financing mirrors the dot-com bubble but maintain a Strong Buy rating for Nvidia due to real earnings.
Quantitative strategists at Seeking Alpha identified a risky trend of vendor financing within the current artificial intelligence investment cycle, drawing parallels to the 1998-1999 dot-com boom. Analysts Steven Cress and Kevin Sanford noted that major suppliers, including Nvidia, Broadcom, and Alphabet, are providing loans to smaller startups to secure future product orders, creating an interconnected financial web similar to the behavior of defunct firms like Lucent and Nortel.
Despite these risks, the analysts argue that today's AI leaders differ from dot-com era companies because they possess substantial real revenue and earnings. While investor concerns over financing risks and higher borrowing costs led to a valuation re-rating starting in June 2026, the market may be experiencing a soft landing characterized by a gradual reset of expectations rather than a systemic collapse.
Nvidia currently holds a Strong Buy rating from the Seeking Alpha Quant system. This rating is based on the company's exceptional growth and a forward P/E ratio that has become more attractive relative to its earnings power.
