Tech investor Ross Gerber dismissed comparisons between the AI boom and the dot-com bubble. He also criticized Warren Buffett for reducing his stake in Apple Inc. (NASDAQ:AAPL).
AI Boom Not Comparable To Dot-Com Bubble
Gerber, the CEO of Gerber Kawasaki Wealth and Investment Management, in an interview with Business Insider, stated that the current AI boom is not comparable to the dot-com bubble, which he experienced first-hand. He pointed out that the S&P 500 had similar returns in the five years leading up to the dot-com crash, suggesting that the current situation might not be as unsustainable as it seems.
Gerber, who started his career in 1994, believes that the high valuations of tech companies are justified by their profitability. He cited companies like Alphabet Inc. (NASDAQ:GOOGL) (NASDAQ:GOOG) and NVIDIA Corporation (NASDAQ:NVDA) as examples of this.
He also expressed his confidence in the potential of AI to drive productivity and earnings, contrasting it with smartphones, which he referred to as “counter useful” and “time wasters.”
Berkshire's Apple Stake Cut, AI Doubts Draw Gerber's Criticism
Gerber criticized Berkshire Hathaway Inc. (NYSE:BRK) for its disinterest in the AI sector and for selling nearly 70% of its Apple stake within the last 18 months. He labeled the sale as “dumb”, arguing that Apple would continue to be profitable for a long time. He also questioned Buffett’s “wisdom” regarding Apple’s exit and many of Berkshire’s stocks and subsidiaries have underperformed in recent years.’
Gerber also questioned Buffett’s investment in Kraft Heinz Co (NASDAQ:KHC), which recently announced its plans to split into two companies. He expressed skepticism about the value created by investing in old brands and partnering with private equity firms known for substantial layoffs.
Despite his criticisms, Gerber acknowledged Buffett’s successful career and his decision to retire as CEO by the end of the year, stating that there’s “something great” about recognizing when it’s time to “leave gracefully”.
Despite praising Apple CEO Tim Cook as his “best partner,” Buffett sold about 20 million Apple shares in the second quarter of 2025, a stake worth roughly $4 billion at current prices.
AI Boom Sparks Debate Over Bubble Risks And Valuations
The AI boom has been a topic of debate in the tech and finance sectors. While some experts like Erik Gordon have warned of a potential AI bubble with severe financial consequences than the dot-com bust, others, like Wedbush’s Dan Ives, disagreed with AI bubble warnings, predicting a sustained tech bull market driven by the “fourth industrial revolution.”
Speaking to high valuation, Gary Black of The Future Fund warned that rising 10-year Treasury yields to 4.29% could hit high P/E stocks like Tesla, NVIDIA, and Palantir hardest, as their valuations are especially sensitive to higher discount rates.
Meanwhile, Deutsche Bank analysts warned that Nvidia's soaring market cap could be fueling a potential U.S. stock market “bubble risk.”
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
