AI boom mirrors dot-com, gold’s frenzy tests ‘greater fool’ theory, says Adrian Mowat

Adrian Mowat

Artificial intelligence may dominate market conversations much like the internet boom of the late 1990s, but the cycle hasn’t reached bursting point yet, says Adrian Mowat, Emerging Market Strategist in an exclusive interview with Moneycontrol.

At the same time, gold’s sharp run is being fuelled by momentum and de-dollarization, but investors should treat it as a “greater fool” trade that requires a clear exit strategy.

“Back in 2000, investors were buying into unprofitable businesses or paying extreme multiples even for profitable ones like Cisco,” Mowat said. “This time, AI leaders such as Amazon, Meta, and Nvidia are very profitable, with strong balance sheets and cash reserves. Valuations are uncomfortable, but I don’t see a bust on the scale of 2000–2001.”

He pointed to some outliers like Palantir that trade at stretched levels, but said the foundations of today’s AI boom are more robust than the dot-com bubble.

On gold, Mowat cautioned that despite its four-year rally, the case remains speculative. “Gold is a greater fool asset—it offers no dividend, no cash flow, only the hope that someone else will pay more. Central banks are diversifying into non-sanctionable assets, and momentum buyers are piling in, but when flows reverse, price moves can be dramatic,” he said. Investors, he added, can ride the momentum for now but must be alert to exit triggers.

India Can Survive, But Near-Term Looks Tough

Mowat stressed that Indian firms are seasoned survivors. “These are well-managed, mature companies. They will manage around these problems. But until there is policy stabilisation, India will struggle to attract the kind of tactical flows that are benefiting other emerging markets.”

Watch the full interview with N Mahalakshmi here:

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.