Paulsen Says 9 S&P Sectors Buffer AI Boom From 2000-Style Crash
Updated
Updated · Business Insider · Jun 16
Paulsen Says 9 S&P Sectors Buffer AI Boom From 2000-Style Crash
1 articles · Updated · Business Insider · Jun 16
Summary
Jim Paulsen argues today’s AI-led rally is less vulnerable to a dot-com-style collapse because tech is more sharply separated from the other nine S&P 500 sectors.
That split matters, he said, because lower correlation between “new era” tech stocks and “old era” stocks reduces overall market risk compared with the late 1990s.
Paulsen added that the larger stabilizing role of non-tech sectors gives investors more incentive to diversify broadly than they did before the 2000 crash.
Goldman Sachs has also said market breadth is the weakest since 2000, but still not as extreme as in the run-up to the dot-com bust.
The broader implication is that if the AI trade breaks, Paulsen expects “boring” old-economy stocks to cushion damage to the overall market.
Is the AI market a safer bet than the dot-com bubble, or is a 1929-style crash looming?
Can 'boring' stocks save the market when AI's energy thirst threatens to short-circuit the tech boom?
2026 Market Bifurcation: AI-Driven Growth, Dot-Com Parallels, and the Resilience of Traditional Sectors
Overview
As of June 2026, the artificial intelligence (AI) sector has become the main force behind America’s economic growth and stock market rally. This rapid rise has sparked debate among investment professionals, with some supporting chip makers and hyperscalers, while others warn of a possible bubble like the dot-com era. Amid these concerns, Jim Paulsen stands out with a contrarian view, arguing that today’s AI-driven market is less risky and fundamentally different from the 2000 dot-com bust. Many analysts are comparing the current AI boom to past bubbles, but Paulsen believes the market’s concentrated nature actually reduces overall risk.