Analysis-Investors use dotcom era playbook to dodge AI bubble risks

Core Viewpoint - Major investors are shifting from highly valued AI stocks to potential next-in-line winners, reviving strategies from the 1990s dotcom era to navigate the current market dynamics [1][2]. Group 1: Investment Strategies - Investors are looking back to the 1990s internet boom, where they successfully transitioned from high-valued stocks to those with growth potential [2]. - The strategy involves identifying "the highest growth opportunities" that the market has overlooked, focusing on sectors like software, robotics, and Asian tech [3]. Group 2: Market Sentiment and Risks - There are signs of irrational exuberance in the market, particularly with risky options trading linked to major AI stocks [3]. - Concerns are raised about the sustainability of the AI boom, with predictions that the next phase will extend beyond current leaders like Nvidia, Microsoft, and Alphabet into related sectors [5]. Group 3: Historical Context - Historical analysis shows that hedge funds did not primarily bet against the dotcom bubble but instead managed to outperform the market by about 4.5% per quarter from 1998 to 2000 by skillfully timing their investments [6]. - Successful strategies included shedding high-priced internet stocks before reinvesting profits into emerging opportunities [7].