NVIDIA's stock price continues to hit new all-time highs, reminiscent of the atmosphere during the Internet bubble era when &#34;Cisco skyrocketed&#34;.On January 29th, NVIDIA closed up nearly 2.4%, once again breaking the previous week's closing high, with a year-to-date increase of nearly 30%.According to Yardeni Research, since the launch of OpenAI by NVIDIA on November 30, 2022, the stock price has risen by over 250% as of January 19. With the surge in NVIDIA's stock, the S&amp;P 500 Semiconductor Index has also increased by 108%.The question of whether the &#34;frenzy for AI has given birth to a new bubble&#34; has become an unavoidable topic in the US stock market. As billionaire and former hedge fund manager Leon Cooperman said, it is hard not to think of the fervent atmosphere of the market during the Internet bubble era when looking at NVIDIA:&#34;In the year 2000, everyone on the Internet was shouting enthusiastically about Cisco, Cisco, Cisco. Cisco was priced at $80 at that time. When tech stocks declined, the market crashed, and its stock price fell by 90% to $6. Today, 23 years later, Cisco's stock price still hasn't reached the level of 2000.&#34;Will NVIDIA become the next Cisco?Some argue that investors in NVIDIA and AMD are currently happy, but unfortunately, investors in Cisco and Intel were also happy in 2000.Cisco is a typical representative of the Internet bubble. Despite its high valuation at the time, investors still saw its future development prospects and bet that Cisco would dominate the Internet hardware market. In 2000, Cisco reached its historic peak. At that time, Cisco's market share in the network switch market was as high as 69%, and its market share in the network router market exceeded 85%.At that time, Microsoft's Windows, Intel's processors, and Cisco's network devices were collectively referred to as the &#34;wintelco system,&#34; representing the three major standards of computer software, hardware, and networking.On March 27, 2000, Cisco's total market value reached a record-breaking $555 billion, making it the highest-valued company in the United States at that time.In 2001, the global Internet economy bubble burst, and Cisco's &#34;myth&#34; was shattered. Its market value once dropped from $579.2 billion to $164.2 billion (a two-thirds decline).And now NVIDIA's AI chips have become a &#34;must-have&#34; infrastructure for tech giants. Ed Yardeni, founder of Yardeni Research, pointed out that the tech giants' frenzy for GPUs is reflected in NVIDIA's stock price. The question now is whether NVIDIA will face a situation similar to Cisco's, where the demand for &#34;AI infrastructure&#34; will plummet once major companies have enough servers and computing power to run AI applications:<blockquote>Perhaps comparing NVIDIA's current glory to the Internet bubble era is not accurate, but on the other hand, perhaps no one can know the true demand for GPUs in the coming years.</blockquote>The Fed's rate cut may create a bubbleInvestors generally expect the Fed to cut interest rates this spring, as inflation is declining faster than expected.Ed Yardeni believes that the arrival of the Fed's rate cut cycle may boost the &#34;irrational exuberance&#34; of the US stock market. If the Fed &#34;celebrates&#34; the victory over inflation too early, it may exacerbate the risk of a significant increase in risk assets and give rise to a stock market bubble. Once the bubble bursts, an economic recession will follow:<blockquote>Former Fed Chairman Alan Greenspan introduced the concept of &#34;irrational exuberance&#34; to describe a situation where the stock market is driven to an abnormal and unsustainable height by investors.If Powell celebrates prematurely due to successfully reducing inflation without causing an economic recession, they may exacerbate the risk of asset inflation.</blockquote>It is worth noting that media reports have previously stated that a large amount of funds have poured into the money market fund market due to high yields. In early December, the size of the US money market fund market reached a record-breaking $5.9 trillion. Many investors, while waiting for the Fed's fight against inflation, have chosen to lock in profits with safer financial instruments.However, when the Fed starts cutting interest rates, this may change everything. As the federal funds rate is lowered, the yield of money market funds will also decrease. These funds may flow into bonds and the stock market in large quantities, thereby exacerbating market volatility and potential collapse risks, according to media analysis:<blockquote>In the current environment, there is a possibility that this decade will witness a stock market frenzy dominated by technology stocks of the 1990s, rather than a replay of the inflation-dominated 1970s or the productivity-dominated prosperity of the 1920s. However, this also means that the market may be brewing a new bubble.</blockquote>Analysts believe that for the Fed, the last major mistake was &#34;ignoring&#34; the lag of the inflation curve from 2021 to early 2022, and the next major mistake may be inflating the &#34;stock market bubble&#34;. When Powell is well aware of this, he may reiterate his stance of not rushing to lower interest rates.

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Cisco is a typical representative of the Internet bubble. Despite its high valuation at the time, investors still have confidence in its future development prospects and are betting that Cisco will dominate the Internet hardware market.

Is today's NVIDIA the same as the original Cisco?