Alphabet, the parent company of Google, issued $20 billion in debt this Tuesday to fund investments in artificial intelligence infrastructure, a sum exceeding its total AI-related spending over the previous three years, according to Capital Group.
The move comes as investors increasingly scrutinize whether the current surge in technology stock valuations, particularly those tied to AI, resembles the dot-com bubble of the late 1990s. However, Chris Buchbinder, an equity portfolio manager at Capital Group, argues that the current environment is more akin to 1998, a period of substantial growth preceding the 2000 market peak.
“We are closer to 1998 than 2000,” Buchbinder stated in a recent analysis published by Finect. He explained that companies involved in AI currently demonstrate stronger financial foundations than the telecom firms of the late 1990s, possessing greater capacity to finance their capital expenditures.
Capital Group’s assessment follows a $30 billion funding round closed by Anthropic on Friday, raising the company’s valuation to $380 billion. These substantial investments, alongside similar commitments from Amazon, Broadcom, Meta, Microsoft, and NVIDIA, suggest continued confidence in the sector’s potential.
Buchbinder cautioned against dismissing the opportunities presented by AI despite the risk of a potential bubble. “It is too early to let the risk of a possible bubble prevent us from taking advantage of the attractive opportunities this new technology offers,” he said. He highlighted the potential for AI to drive productivity gains as a key factor supporting its growth.
The analysis by Capital Group examined the price-to-earnings ratios and market capitalization of seven major companies with significant AI exposure – NVIDIA, Microsoft, Apple, Amazon, Meta, Broadcom, and Alphabet – as of November 30, 2025. The firm also drew comparisons to the “Four Horsemen” of the dot-com era – Microsoft, Cisco, Intel, and Dell – to assess the current market dynamics.
Buchbinder, a veteran of the investment industry with 30 years of experience, previously worked as a telecommunications analyst during the late 1990s tech bubble, providing him with a firsthand perspective on market exuberance and subsequent corrections. He noted the parallels between current investor enthusiasm and the “irrational exuberance” observed in 1999.
