Is the "AI Hype Cycle" Just Beginning? Why the Biggest Gains Are Still Ahead

Core Insights - Nvidia has initiated a significant multiyear stock market rally driven by the artificial intelligence (AI) sector, attracting substantial investment into companies associated with this technology [1] - The current AI boom is compared to the dot-com boom, with concerns about a potential bubble; however, there are notable differences indicating that the AI hype cycle is just beginning [2] Financial Performance - AI is already generating profits, with Nvidia reporting nearly $32 billion in revenue for fiscal Q3 2026, largely from GPU sales for AI workloads [5] - Major tech companies like Meta Platforms and Microsoft have also seen profit increases due to AI-related revenues and the implementation of AI tools [5] Industry Trends - Big tech is expected to invest over $400 billion in AI infrastructure this year, with plans for increased spending in the following year, indicating a strong commitment to generating positive returns on investment [7] - The AI boom is characterized by revenue growth and profitability, contrasting with the dot-com bubble, and small AI companies still present opportunities for significant returns [8]