Back to the future, NASDAQ hits the 5,000

The Nasdaq Composite Index reached the 5,000 points in intraday session on March 2, 2015, a first time since the internet stock bubble collapsed 15 years ago. As a result, everyone keeps asking the same question: is there a new bubble? Indeed there are high valuations but today’s situation seems very different from what took place in 2000, most of the media contributors said. The internet has developed exponentially like many had forecast 2 decades ago, and has become an essential omnipresent tool for about 80% of the developed countries’ population, and growing in similar proportions in other countries. The average PER in 2000 was 66.5, today’s is around 25. Technology represented 65% of the NASDAQ instead of 43% today.

The number of listed companies halved and stands now at approximately 3,100. It’s undeniable the internet sector is stronger today with – often full-of-cash – world-changing companies like Apple or Google and daily life-changing companies like Netflix or Amazon. Don’t get too enthusiastic however. Many NASDAQ-listed star companies have yet to become profitable, including some sector leaders like Amazon or media attractive outsiders like Tesla. Also, companies like Uber or Snapchat have got high theoretical valuations already though they’re not listed yet. The NASDAQ is not as excessive as it used to be, but still is for a number of companies whose uncertain business models remind us of the 2000s.