Despite an ongoing pandemic and the U.S. economy barely limping along, the Nasdaq is still trading more than 50% above its March lows. The surge in tech stocks in 2020 has understandably led investors to draw comparisons to the dot-com bubble in 2000.
The Nasdaq ultimately peaked at 5,048.62 on March 10, 2000. Of course, some dot-com bubble stocks have performed much better than others in the 20 years since the bubble burst.
FANG Stocks Of Dot Com Bubble: Today’s investors are very familiar with the FANG stocks, Facebook, Inc. (NASDAQ: FB), Amazon.com, Inc. (NASDAQ: AMZN), Netflix, Inc. (NASDAQ: NFLX) and Alphabet, Inc. (NASDAQ: GOOGL) (NASDAQ: GOOGL). These four stocks both led the bull market since the 2008 financial crisis and dominate today’s market with their massive market caps.
The dot-com had its own growth of FANG-esque stocks that dominated the tech sector back in 2000:
Microsoft Corporation (NASDAQ: MSFT) reached a dot-com bubble peak market cap of $561 billion back in March 2000.
Cisco Systems, Inc. (NASDAQ: CSCO) reached a peak market cap of $555.4 billion.
Intel Corporation (NASDAQ: INTC) peaked at a $509 billion market cap in August 2000.
Oracle Corporation (NYSE: ORCL) had its dot com market cap top out at $245 billion in March 2000.
Finally, IBM (NYSE: IBM) had a peak dot com-era market cap of $215 billion.
Altogether, these five tech stocks had a peak combined dot com market cap of more than $2.08 trillion, but that valuation certainly didn’t last for long.
See Also: 5 Ways Today’s Market Resembles The Dot-Com Bubble
Dot-Com Bubble Fallout: A year after the Nasdaq peaked in March 2000, the Nasdaq was down 59.3%. All five of these big tech stocks had taken a hit. IBM was the most resilient of the group, declining just 5.4%. Microsoft shares
- Legendary tech investor Bill Gurley told CNBC on Friday that the stock market reminds him of the late ’90s dot-com bubble.
- “There is certainly what I would call a highly speculative nature to the markets today, a willingness to take on risks, a willingness to get excited about projects that may be five or 10 years in the future,” the Benchmark partner said.
- Other investors like Stanley Druckenmiller have drawn similar conclusions about today’s technology stocks.
Legendary venture capitalist Bill Gurley told CNBC on Friday that the stock market reminds him of the late-1990s tech trading environment that led to the dot-com bubble.
“There is certainly what I would call a highly speculative nature to the markets today, a willingness to take on risks, a willingness to get excited about projects that may be five or 10 years in the future, that we haven’t seen since the ’99 time frame,” the Benchmark partner said.
He added: “I really can’t speculate or know exactly what it was, or the confluence of events that led to that, but we are living in a more speculative technology market for sure.”
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Other investors have echoed these concerns about frenzied traders pushing technology stocks into dangerously high territories. The top five tech stocks — Microsoft, Apple, Amazon, Alphabet, and Facebook — make up nearly a quarter of the S&P 500.
Billionaire investor Stanley Druckenmiller said in September that the market was in