Baggy jeans are back in fashion, South Park is dominating headlines, and there are worries about a technology bubble. This might sound like we have stepped back in time to the late 1990s but hold off panicking about an artificial-intelligence bust just for now.

As soon as Oracle gave the AI trade a boost with its unexpected $455 billion order backlog, the doubts began. A major part of the contracted business appears to be linked to a cloud-computing deal with ChatGPT-developer OpenAI, on the hook for tens of billions in annual spending while still losing money itself.

Add in an IPO frenzy -- many for companies that are lossmaking or dependent on the cryptocurrency boom -- and there are definite signs of exuberance. The S&P 500 and Nasdaq Composite hit record highs on Wednesday, again driven by the AI trade.

Still, comparisons to the dot-com bubble miss the mark. Some might have doubts about Oracle, but it is hardly alone in its confidence -- Google said this week its own cloud-computing business has a $106 billion backlog, while Microsoft struck a deal worth up to $19.4 billion to get more capacity with cloud company Nebius. Those indicate current demand, not hopeful forecasts.

More importantly, the dot-com bubble burst after a series of interest-rate increases from the Federal Reserve, driving up borrowing costs for tech companies that had taken on heavy debt loads to achieve their internet dreams. In contrast, the Fed is likely to resume a rate-cutting cycle this month -- with wholesale inflation unexpectedly slowing in August, reducing fears of tariff-driven price increases. With more than $7 trillion sitting in money-market funds facing smaller returns due to lower interest rates, plenty of dollars could be heading into the stock market.

Learning the lessons from the dot-com bubble and watching for tangible signs of AI demand is wise. But just like Labubu dolls have replaced Furbies, the hot toy of the nineties, it's a mistake to think history repeats itself exactly.

-- Adam Clark

***

Move Over Musk, There's a New Richest Person In Town. For Now.

Oracle's Chairman Larry Ellison passed Tesla CEO Elon Musk as the world's richest person when his Oracle stock jumped more than 36%. The company shocked Wall Street with a massive revenue forecast tied to demand for its cloud-computing infrastructure. It's long been seen as a high-end software company. Not anymore.

   -- The rise added $244 billion to Oracle's market value. Ellison, who owns 
      1.2 billion shares of Oracle, saw his net worth rise to over $400 
      billion. That's above Musk's net worth of approximately $390 billion. 
      It's the stock's largest one-day percentage gain since 1992, according to 
      Dow Jones Market Data. 
 
   -- Spending on agentic artificial intelligence is forecast to rise to around 
      $1.3 trillion over the next four years, according to the International 
      Data Corporation. The biggest hyperscalers have committed around $400 
      billion this year alone and all of that is going to need cloud-computing 
      space. 
 
   -- Oracle, Microsoft, Amazon, and Google's parent Alphabet are the only 
      companies able to provide that space with scale and flexibility. Oracle's 
      own five-year forecast for cloud infrastructure revenue assumes a 
      compound annual growth rate of 70%. That would take its 2030 tally to 
      $144 billion. 
 
   -- Ellison says much of the demand is for inference capacity, which enables 
      companies to generate revenue and monetize their investment in AI 
      training. Ellison sees inference as the bigger market, used for automated 
      robotic factories, autonomous driving, drug design, and legal and sales 
      processes. 

What's Next: Wealth rankings will fluctuate, naturally, but as MarketWatch points out the competition between Ellison and Musk is likely to remain friendly. The two have shared commercial interests in some projects, the report said, and Ellison served on Tesla's board and helped finance Musk's purchase of X.

-- Angela Palumbo, Martin Baccardax, and Tae Kim

***

Labor Department Investigates Federal Data Statistics Gathering

The Labor Department is investigating the Bureau of Labor Statistics' collection and reporting of closely watched economic data, centering on recent announcements by the BLS that it would reduce data collection for the consumer price index and the producer price index.

   -- The review will also look into a large downward revision of the BLS's 
      estimate of monthly payroll growth this week. The Inspector General will 
      be looking into "mitigating strategies" for collecting PPI and CPI data, 
      as well as "collecting and reporting, including revising, monthly 
      employment data." 
 
   -- Last month, President Donald Trump fired Commissioner Erika McEntarfer 
      after the BLS released a weak July jobs report that also sharply revised 
      previous months downward. On Tuesday, BLS said it would cut net payroll 
      gains for the year ending in March by nearly one million. 
 
   -- The challenges facing federal statistical agencies to produce timely, 
      reliable economic data have been a growing concern. Most economists say 
      the recent revisions have nothing to do with politics. The agencies have 
      faced lower survey response rates and budget shortfalls for more than a 
      decade. 
 
   -- Trump and his allies haven't acknowledged the lack of resources in their 
      critiques of the agency. Stephen Miran, chair of the Council of Economic 
      Advisers and Trump's nominee to the Federal Reserve's Board of Governors, 
      has said he believes that the BLS data have deteriorated. 

What's Next: Trump has nominated E.J. Antoni, currently chief economist of the conservative think tank The Heritage Foundation, to head the BLS. Senate confirmation could come as soon as October. Until a commissioner is confirmed, Bill Wiatrowski has been serving as acting commissioner.

-- Megan Leonhardt

***

IPO Mania Returns. Are You Thinking About a Talking Sock Puppet?

If the flurry of initial public offerings recalls a talking dog sock puppet, don't fret. It's hard not to think about Pets.com, the dot-com era company that went public in February 2000 and shut down months later after the bubble burst. Investors may wonder if we're headed in that direction.

   -- There's no denying that there is excessive enthusiasm about IPOs these 
      days, particularly for any company that can claim crypto or artificial 
      intelligence as a big part of its narrative. Buy-now, pay later company 
      Klarna jumped 30% from its IPO price in its opening trade Wednesday. It 
      closed up 15%. 
 
   -- There are more buzzy IPOs coming, with blockchain lender Figure and 
      crypto brokerage Gemini expected this week. StubHub is set to debut next 
      week. The recent spate of IPOs have a common theme: large initial stock 
      pops followed by a gradual cooling off in the weeks afterward. 
 
   -- There are eerie parallels to 2000. The Nasdaq is once again at a record 
      high, near 22,000 now compared with just over 5,000 back then. Oracle, 
      which soared more than 35% Wednesday, appears to be 2025's version of 
      Cisco, the megacap that was the poster child for internet enthusiasm. 
 
   -- Retail investors have been driving the current demand for IPOs after a 
      drought in the past few years. They don't even seem to require 
      profitability. Circle and Figma both reported net losses in their first 
      quarter following their market debuts. Klarna and Gemini aren't 
      profitable either. 

What's Next: It may be a mistake to declare it's 2000 all over again for the broader tech sector. For one, valuations are more rational. The Roundhill Magnificent Seven exchange-traded fund trades at about 32 times earnings estimates. That's not cheap. But it isn't bubbiliciously expensive like in early 2000 either.

-- Paul R. La Monica

***

Drugmakers Confront White House Crackdown on Prescription Drug Ads

A Trump administration crackdown on prescription drug advertising directed at consumers could substantially drag on drugmaker sales if it's successful at reining in the more than $10 billion they spend on ads each year in the U.S. It's unclear how the effort will fare if it faces legal challenges.

   -- Stopping short of banning ads outright, the Department of Health and 
      Human Services, the Food and Drug Administration, and the White House 
      have promised a sweeping attack on pharmaceutical ads, including an 
      important rule change, and a threat of "aggressive enforcement." 
 
   -- Courts have held that the ads are shielded by First Amendment speech 
      protections. Direct-to-consumer ads for prescription drugs ballooned in 
      the late 1990s after FDA rules changes allowed drugmakers to abbreviate 
      risk disclosures in their TV ads. Various studies suggest that 
      direct-to-consumer ads have a significant impact on sales. 
 
   -- Surveys show that patients consistently report asking their doctors about 
      a medicine they heard about in an ad. A poll by the health policy group 
      KFF in January found that 18% of people who have seen ads for 
      prescription drugs had asked a doctor about a medicine they saw 
      advertised. 
 
   -- Ozempic and Wegovy maker Novo Nordisk spent nearly $530 million 
      advertising the two blockbuster drugs in 2024, according to Fierce Pharma, 
      citing MediaRadar data. At the same time Novo and rival Mounjaro maker 
      Eli Lilly are battling for consumers against telehealth firms selling 
      knockoff drugs to weight loss customers. 

What's Next: Novo Nordisk is cutting 9,000 jobs, or 11% of its global staff, as it strives to get to $1.25 billion in annual cost savings by the end of 2026. About 5,000 of the job cuts are expected to happen in Denmark.

-- Josh Nathan-Kazis and Liz Moyer

***

Auto Lender Tricolor Files for Bankruptcy

Tricolor Holdings, a Dallas-based chain of used-auto dealers, filed for Chapter 7 bankruptcy on Wednesday. The liquidation plan, filed in the U.S. Bankruptcy Court in Dallas, listed between $1 billion and $10 billion in both assets and liabilities.

   -- Tricolor, which made loans to individuals lacking credit, had been 
      identified as a socially minded -- or ESG (environmental, social and 
      governance) investment by BlackRock and other major financial firms. 
      Multiple U.S. banks face exposure to the bankruptcy, including JPMorgan 
      Chase and Fifth Third Bancorp. 
 
   -- The auto lender was the focus of a Barron's investigation in November 
      2022 that raised questions about the firm's lending practices and the 
      quality of vehicles sold on its lots. 
 
   -- The bankruptcy filing comes after a regulatory filing from Fifth Third 
      Bancorp late Tuesday, in which the Cincinnati-based bank said it was 
      taking a write-down of up to $200 million tied to what it called 
      fraudulent activity at a commercial borrower. That borrower is Tricolor, 
      a person familiar with the situation told Barron's on Wednesday. The 
      company didn't respond to requests for comment. 
 
   -- Tricolor operates 65 auto lots across six states, specializing in sales 
      and loans to undocumented Spanish-speaking buyers. That focus has earned 
      Tricolor certification under the U.S. Treasury as a Community Development 
      Financial Institution, a designation granted to businesses that lend to 
      members of underserved communities. 

What's Next: Businesses are scaling back or playing down their ESG goals under President Donald Trump's administration, which has directed the U.S. Attorney General to identify and block state laws that address climate change and other ESG initiatives.

-- Jacob Adelman and Rebecca Ungarino

***

-- Newsletter edited by Liz Moyer, Patrick O'Donnell, Rupert Steiner

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

September 11, 2025 06:57 ET (10:57 GMT)

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