Exploring the Turning Point of the AI Rally Lessons from the Dot-com Bubble

This report analyzes the Dot-com Bubble to identify early warning signals for a potential reversal in the current AI and semiconductor rally, emphasizing the critical role of foreign investor flow reversals.

Key Takeaways

• 1.The most important signal for a potential rally reversal is a shift in foreign investor flows from net buyers to net sellers.
• 2.Potential catalysts for a reversal include rising interest rates, increased equity supply (IPOs/secondary offerings), slowing earnings revisions, and increased sensitivity to negative news.

Table of Contents

• Key Takeaways
• 1. Literature review: What happened during the Dot-com Bubble?
• 2. Key indicators from Japanese equities currently
• 3. Conclusion: Reversal of overseas investor flows most important signal

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