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Is AI a bubble? Four booms aligned at their peak
Put the AI chip index next to three past booms, each set to 100 at its peak, and a pattern shows. Four months after its June 2026 high, the chip index is falling at the pace of the telecom bubble of 2000, faster than the Nasdaq. The railroads of 1909 tell a different story. What the curves say, and what they cannot.
## The method
Four monthly price series, each set to **100 at its own peak**, so their shapes can be laid on top of each other: US railroads (peak September 1909), the Nasdaq (February 2000), Nasdaq telecom (February 2000) and the US chip index SOX (June 2026), our stand-in for the AI build-out.
## The climb
Fitted over the 36 months before each peak, the AI curve looks most like the dot-com boom: an average gap of **8.7 points** from the Nasdaq and 9.4 from telecom, against 44 from the railroads. The AI run-up into its peak was **steeper than both**.
## Four months later
```chart
{"title": "Four months after the peak (peak = 100)", "unit": "", "series": ["Level"], "rows": [["Nasdaq, 2000", 84], ["Nasdaq telecom, 2000", 76], ["AI chips (SOX), 2026", 75]], "note": "Monthly closes, each series set to 100 at its own peak."}
```
At this point after their peaks, the Nasdaq stood at 84 and telecom at 76. The chip index is at **75**: on the telecom path, below the Nasdaq's.
## The railroads, the counter-example
Railroads did not crash after 1909. They went roughly flat for years, because they were businesses that collected cash every day. That is the question the curves cannot answer for AI: whether the revenue arrives in time to carry the debt that built the data centres (see [the debt behind the AI boom](/news/markets/the-debt-behind-the-ai-boom)).
## What the curves cannot tell you
A shape is not a forecast. Four series are a small sample, the AI curve has only four months after its peak, and each past boom ended for its own reasons. The comparison says where we are on a familiar path, not where the path goes next.
The curves update on the [AI storm dashboard](https://xbe.at/storm/).
*Research notes, not investment advice. Data as of 31 October 2026; railroads from the NBER macrohistory series.*
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