Analyst Warns Nasdaq AI Rally Echoes 2000 Bubble as CAPE Hits 41

Financial columnist Will Ebiefung warned that investors buying at the current AI-driven market peak could face a 15-year wait to break even, as occurred after the March 2000 Nasdaq dot-com high. The cyclically adjusted price-to-earnings (CAPE) ratio has climbed to 41, versus a historical average of 17.4 and just below the 1999 peak of 44. Unlike 2000, when unprofitable tech firms drove the rally, today's AI wave is supported by profitable hardware leaders Nvidia (NVDA) and Micron (MU), with gross margins of 75% and 85%, respectively. Ebiefung cautioned, however, that this profit base is fragile: frontier AI model developers face fierce competition, regulatory uncertainty and soaring costs. Leaked OpenAI documents reportedly show 2025 revenue of $13 billion against a $21 billion loss, with management projecting nearly $280 billion in spending by end-2030. Macro risks compound the threat. Trump administration tariffs and Middle East military action that partially blocked the Strait of Hormuz have pushed the Fed's target rate to 3.75%-4.00% and the 10-year Treasury yield near 5%, raising data-center financing costs. Ebiefung advised diversifying away from technology.