The Nasdaq is flashing strongest dot-com era signal since 1999

The Nasdaq is doing something it hasn’t done since the frothy days of the dot-com boom.

As of Tuesday’s close, the tech-heavy index has posted 60 consecutive trading sessions above its 20-day moving average, according to The Kobeissi Letter.

That kind of technical set-up hasn’t been seen since 1999.

Back then, the streak ended at 77 sessions in early February 1999, right before the market began to spiral into the crash that defined a generation of traders.

This time around, the gains are a little more measured. The Nasdaq has climbed 23% over the past 60 sessions, compared to more than 50% over the same stretch during the ‘99 rally.

But the momentum is still eyebrow-raising, or as The Kobeissi Letter put it, “truly historic.”

And while the comparisons to the dot-com era are impossible to ignore, some major differences are keeping investor confidence high.

For one, earnings growth, especially from megacaps, has actually been there to support valuations. The Trump administration is leaning toward extending the current 90-day tariff truce with China and other partners.

Big Tech is still doing all the heavy lifting

While the broader market has participated in the recovery, once again, it’s the hyperscalers that are driving the rally.

Nvidia (NVDA) has been the undisputed MVP. The chipmaker’s market cap is now sitting above $4 trillion, making it, as InvestorsObserver pointed out, more valuable than the entire German stock market.

Fueled by AI fever, tech stocks clocked a 22% gain in Q2, their hottest stretch since the Covid recovery.

According to Barron’s, cloud giants are on pace to spend $330 billion this year, much of it on AI buildouts. This spending is driving the so-called “circular capex” trade where Big Tech invests in infrastructure, which props up demand for semis, software, and services across the board.

“The ‘circular capex’ story at the top of the market remains intact,” said Daniel Morgan, portfolio manager at Synovus Trust. “Large tech firms investing in AI infrastructure [are] driving demand for semis, software, and services.”

And now that those same companies are locking in investment commitments under the Trump administration’s AI-focused policy framework, Morgan added, “one has to believe the boom will continue, at least in the near term.”

Whether it ends like 1999 or not, one thing is clear, this rally is running on AI.