In 1999, investors poured capital into any company with “.com” in its name. Valuations disconnected from earnings. Then the crash came. Today, a new wave of investor enthusiasm surrounds artificial intelligence—and the pattern recognition is making some seasoned investors nervous.
But there’s a crucial difference between the dot-com era and the current AI moment, and understanding it is the difference between being positioned correctly and sitting on the sidelines of a structural transformation. At Waterloo Capital, our investment team has spent considerable time dissecting AI’s actual economic footprint: where real revenue is being generated, which sectors stand to benefit most, and where the hype has outrun the fundamentals.
This piece offers our candid view—not a cheerleading session, but a rigorous look at what AI investing actually means for a diversified, long-term portfolio in 2025. Please enjoy the sixth theme release in our six-part series leading up to the release of Waterloo Capital’s 2025 Annual Outlook.