• Menu
  • Skip to right header navigation
  • Skip to main content
  • Skip to secondary navigation
  • Skip to primary sidebar
  • Skip to footer

Before Header

Philadelphia Wealth & Asset Management Firm

wealth management

  • Why TBA?
    • Why Tower Bridge Advisors?
    • FAQs
  • Who We Serve
    • Individuals & Families
    • Financial Advisors
    • Institutions & Consultants
  • People
    • James M. Meyer, CFA® – CEO
    • Robert T. Whalen – Principal
    • Nicholas R. Filippo – VP, Sales & Marketing
    • Jeffrey Kachel – CFO, Principal & CTO
    • Chad M. Imgrund – Sr. Research Analyst
    • Christopher E. Gildea – Senior Portfolio Manager, Co-Chief Investment Officer
    • Daniel P. Rodan – Sr. Portfolio Mgr.
    • Christopher M. Crooks, CFA®, CFP® – Senior Portfolio Manager, Co-Chief Investment Officer
    • Michael J. Adams – Sr. Portfolio Manager
    • Shawn M. Gallagher, CFA® – Sr. Portfolio Mgr.
  • Wealth Management
    • How to Select the Best Wealth Management Firms
  • Process
    • Financial Planning
    • Process – Equities
    • Process – Fixed Income
  • Client Service
  • News
    • Market Commentary
  • Video
    • Economic Updates
  • Contact
    • Become A TBA Advisor
    • Ask a Financial Question
  • We are looking to add advisors to our team. Click here to learn more!
  • We are looking to add advisors to our team. Click here to learn more!
  • Click to Call: 610.260.2200
  • Send A Message
  • Why TBA?
    • Why Tower Bridge Advisors?
    • FAQs
  • Services
    • Individuals & Families
    • Financial Advisors
    • Institutions & Consultants
  • People
    • James M. Meyer, CFA – Principal & CIO
    • Raymond F. Reed, CFA – Principal
    • Robert T. Whalen – Principal
    • Nicholas R. Filippo – VP, Sales & Marketing
    • Jeffrey Kachel – CFO, Principal & CTO
    • Chad M. Imgrund – Sr. Research Analyst
    • Christopher E. Gildea – Sr. Portfolio Mgr.
    • Daniel P. Rodan – Sr. Portfolio Mgr.
  • Wealth Management
  • Our Process
    • Financial Planning
    • Process: Equities
    • Process – Fixed Income
  • Client Service
  • News
    • News & Resources
    • Market Commentary
  • Videos
    • Economic Updates
  • Contact
    • Become a TBA Advisor
    • Ask a Financial Question
wealth management

July 31, 2025 – The U.S. economy demonstrated a strong rebound in Q2 2025 with 3.0% GDP growth. Tech giants Microsoft and Meta significantly exceeded earnings expectations, fueled by the ongoing AI boom and robust cloud and digital advertising performance. While the current AI-driven market rally shows parallels to the dot-com era’s speculative growth, today’s tech giants exhibit stronger financial fundamentals than many during the earlier boom. Investors should balance the allure of high growth with valuation discipline and diversification to mitigate risks in this dynamic market.

//  by Tower Bridge Advisors

The Economy: A Strong Rebound
Good news on the economic front. The U.S. economy bounced back strongly in the second quarter of 2025. Our gross domestic product (GDP), which measures the total value of goods and services produced, initially grew by 3.0% from the previous quarter. This was better than expected and a welcome reversal from the slight contraction we saw in the first quarter.

What drove this growth? Interestingly, we imported less from other countries, and consumer spending increased. This helped offset some declines in business investments and our exports. When it comes to inflation, the core personal consumption expenditures (PCE) price index, a key measure that the Federal Reserve watches, rose by 2.5%. While slightly above forecasts, it was lower than the previous quarter’s reading, suggesting inflation might be cooling a bit.

Tech Giants Shine: Microsoft & Meta Lead the Way
The AI boom continues to be a major theme, and recent earnings reports from tech giants like Microsoft and Meta Platforms certainly underscore this.

Microsoft’s stock jumped after yesterday’s earnings release, as they comfortably beat financial expectations. A big driver was their Azure cloud business, which saw an impressive 39% year-over-year growth. This strong performance puts Microsoft on a path to potentially reach an incredible $4 trillion market capitalization—a testament to their scale and innovation.

Similarly, Meta Platforms’ shares surged after their financial report significantly exceeded second-quarter earnings expectations. Meta delivered strong performance in digital advertising, much like Alphabet. Meta reported earnings of $7.14 per share on $47.5 billion in revenue, both well above what Wall Street analysts predicted. Meta also highlighted their substantial investments in AI infrastructure, emphasizing their vision for “personal superintelligence.”

It’s clear the AI excitement is as strong as ever, leading us to ponder just how high company valuations can go. It feels like all the pieces are falling into place for continued growth. For smart investors, the challenge is balancing the natural fear of missing out (FOMO) with valuation discipline. Is this a bubble, or are we in the early stages of a rational market rally? Many of us remember past technology revolutions and the consequences of overly optimistic expectations.

A Look Back: Intel in the Dot-Com Era vs. Nvidia Today
To understand the current AI landscape, it’s helpful to look back at history. The journey of Intel during the late 1990s dot-com bubble and Nvidia’s recent surge in the AI revolution offer fascinating comparisons and important differences.

Intel’s Dot-Com Ride
During the internet boom, Intel, as the leading chipmaker for personal computers, was seen as a fundamental building block of the new digital age. Its stock price soared, driven by the widespread adoption of PCs and the internet. From early 1998 to late 2000, Intel’s stock climbed dramatically, reflecting investor belief that its chips were essential to the “new economy.” This period was marked by intense speculation, with Intel’s price-to-earnings (PE) ratio jumping from about 20 times to 60 times expected earnings. Many internet companies at the time didn’t even have sustainable business models, leading to widespread overvaluation in the tech sector.

When the dot-com bubble burst between 2000 and 2002, Intel’s stock plummeted, losing a large portion of its value, and its P/E ratio fell back to around 20 times. The bust happened due to several factors: too much supply, the realization that many internet companies weren’t profitable, and a general market correction. Although Intel was a strong company with real products and profits, it was caught in the broader market downturn and a slowdown in demand for PCs. Interestingly, even as its stock price fell, Intel’s earnings per share (EPS) continued to grow, showing a disconnect between market sentiment and the company’s actual business performance during the bust. This period was a stark reminder that even market leaders aren’t immune to speculative bubbles.

Nvidia’s AI Ascent
Fast forward to the 2020s, and Nvidia is in a similar, yet arguably stronger, position at the forefront of the AI boom. As the top designer of graphics processing units (GPUs), which are crucial for training and running AI models, Nvidia’s stock has seen a meteoric rise, especially since 2022. This surge is fueled by real demand for their high-performance chips, with their data center business becoming their main source of revenue.

Unlike many dot-com companies, Nvidia has strong financial fundamentals, consistent revenue and earnings growth, and a deeply established ecosystem of software tools (like CUDA) that make its GPUs indispensable for AI development. Reflecting this optimism and growth, Nvidia’s P/E ratio has increased from about 25 times to 40 times since 2023.

Key Differences & What to Watch For
While both Intel and Nvidia experienced immense stock growth driven by major technological shifts, the nature of these booms differs. Intel’s peak was part of a broader, more speculative bubble that included many unprofitable ventures, and its stock’s P/E ratio inflated significantly beyond its earnings growth. Its decline was severe as the market corrected irrational excitement, even though its earnings continued to grow.

Nvidia’s current rise, while rapid, is supported by strong financial performance. However, it could face challenges if the supply of AI computing power (driven by massive investments in data centers and chip manufacturing) eventually exceeds the growing demands from AI applications. The risk of oversupply, similar to the fiber optic overcapacity during the dot-com era, could lead to price reductions and a re-evaluation of valuations, even for a fundamentally strong company like Nvidia. Its ability to maintain its lead against new competitors and continue innovating will be crucial for sustaining its growth as the AI market matures, potentially preventing a sharp correction if demand can’t keep pace with the increasing supply.

Concluding Thoughts on Market Performance
Since the market lows this past April, stock market performance has been heavily influenced by companies with significant AI revenue sources. For instance, the S&P High Yield Dividend Aristocrats Index has seen a gain of +4.3% year to date, while the technology-focused S&P 500 Index is up +8.2% over the same period. This difference in performance can continue for a while, but history suggests it won’t last forever. Staying disciplined by focusing on valuations and fundamentally strong businesses within a diversified portfolio is a time-tested approach to managing risk during boom times like we’re experiencing today.

Businessman Mark Cuban turns 67 today, author J.K. Rowling turns 60 and actor Wesley Snipes is 63.

Christopher Gildea 610-260-2235

Tower Bridge Advisors manages over $1.3 Billion for individuals, families and select institutions with $1 Million or more of investable assets. We build portfolios of individual securities customized for each client's specific goals and objectives. Contact Nick Filippo (610-260-2222, nfilippo@towerbridgeadvisors.com) to learn more or to set up a complimentary portfolio review.

# – This security is owned by the author of this report or accounts under his management at Tower Bridge Advisors.

Additional information on companies in this report is available on request. This report is not a complete analysis of every material fact representing company, industry or security mentioned herein. This firm or its officers, stockholders, employees and clients, in the normal course of business, may have or acquire a position including options, if any, in the securities mentioned. This communication shall not be deemed to constitute an offer, or solicitation on our part with respect to the sale or purchase of any securities. The information above has been obtained from sources believed reliable, but is not necessarily complete and is not guaranteed. This report is prepared for general information only. It does not have regard to the specific investment objectives, financial situation or the particular needs of any specific person who may receive this report. Investors should seek financial advice regarding the appropriateness of investing in any securities or investment strategies discussed in this report and should understand that statements regarding future prospects may not be realized. Opinions are subject to change without notice.

Filed Under: Market Commentary

Previous Post: « July 28, 2025 – The world looks pretty healthy but rising speculation elevates our concern. When the amount of corporate money flowing into bitcoin is twice the amount raised in initial public offerings to date, that gets our attention. With that said the focus this week will be on earnings and a slew of economic data on inflation, interest rates, and employment, all of which can be market moving.
Next Post: August 4, 2025 – Confusing economic reports on GDP and the labor market can be decoded to show that growth in the first half of 2025 was muted while inflation was well contained before the full impact of tariffs. If those data trends continue, look for one to three 25-basis point rate cuts before the end of 2025. That outlook may change with subsequent data but it is increasingly clear that an economy that has proven so resilient may need a bit more help to offset the impact of tariffs and significantly lower population growth. »

Primary Sidebar

Market Commentary

Sign Me Up!

Latest News

  • August 21, 2025 – This Friday we will receive commentary from the Federal Reserve after its annual gathering in Jackson Hole, Wyoming. The central-bank gathering has sometimes been a venue for marking shifts in Fed policy. Last year Fed Chairman Powell used it to signal that rate cuts were coming, and followed through the next month. The Snake River, which runs through Jackson Hole, provides an apt backdrop for the Fed’s meeting where the waters can be turbulent and winding. In the meantime, technology stocks have retreated this week and a number of consumer-focused companies have provided both encouraging and uncertain signals.
  • August 18, 2025 – The noise of front-page news doesn’t seem to coincide with record stock prices. War, ICE raids, violent storms and tariffs may be the topics of the Sunday talk shows, but the stock market cares more about earnings and interest rates. Earnings are rising and interest rates are stable. Will that continue? Earnings growth should slow a bit as the full impact of tariffs hits. While the Fed Funds rates should start to decline this fall, markets will focus on changes in the 10-year Treasury yield more than the Fed Funds rate.
  • August 14, 2025 – The market is increasingly divided, with a strong AI-driven rally on one side and a weakening consumer economy on the other. This contradiction creates a significant risk of a sudden economic downturn or stagflation, as soaring tech valuations may be unsustainable without broader economic support.
  • August 11, 2025 – There is an expression that rationality requires separating the wheat from the chaff. In Wall Street, to be a successful investor, it is necessary to separate hype from reality. That is particularly important as speculative fever rises. Some of the hype is real; some is nonsense. Don’t simply follow consensus. As investors you invest in companies, not hype, not single products, hot today but cold as ice tomorrow. Think rationally and you will be a successful investor.
  • August 7, 2025 – Football is considered a game of inches. Consider the “Brotherly Shove,” popularized by the Philadelphia Eagles, which is a play used to gain very short yardage and advance down the field. In order to counter this offense, defensive opponents have employed various tactics, but without much success. Two consumer-focused companies, McDonalds and Disney, recently reported quarterly earnings, and are slugging it out on the field as consumer preferences change and these companies try to adapt.
  • August 4, 2025 – Confusing economic reports on GDP and the labor market can be decoded to show that growth in the first half of 2025 was muted while inflation was well contained before the full impact of tariffs. If those data trends continue, look for one to three 25-basis point rate cuts before the end of 2025. That outlook may change with subsequent data but it is increasingly clear that an economy that has proven so resilient may need a bit more help to offset the impact of tariffs and significantly lower population growth.
  • July 31, 2025 – The U.S. economy demonstrated a strong rebound in Q2 2025 with 3.0% GDP growth. Tech giants Microsoft and Meta significantly exceeded earnings expectations, fueled by the ongoing AI boom and robust cloud and digital advertising performance. While the current AI-driven market rally shows parallels to the dot-com era’s speculative growth, today’s tech giants exhibit stronger financial fundamentals than many during the earlier boom. Investors should balance the allure of high growth with valuation discipline and diversification to mitigate risks in this dynamic market.
  • July 28, 2025 – The world looks pretty healthy but rising speculation elevates our concern. When the amount of corporate money flowing into bitcoin is twice the amount raised in initial public offerings to date, that gets our attention. With that said the focus this week will be on earnings and a slew of economic data on inflation, interest rates, and employment, all of which can be market moving.
  • July 24, 2025 – Like the game of Go in China, or Igo in Japan, the evolving tariff negotiations between the U.S. and our trading partners are creating a constantly changing gameboard and continue to dominate the news cycle. Markets reacted positively yesterday to indications that Japan’s tariffs would be capped at 15%, less than the 25% expected, and a potential deal with the European Union. Tariffs are already having an impact on corporate earnings and outlooks, although equity markets continue to gain ground.
  • July 21, 2025 – Last week was a quiet week for news. The real heart of earnings season starts to kick in this week. Meanwhile the new crypto legislation signed into law last week is likely to change our lives a lot more than what we will learn from a few earnings reports.

Footer

Wealth Management Services

  • Individuals & Families
  • Financial Advisors
  • Institutions & Consultants

Important Links

  • ADV Part 2 & CRS
  • Privacy Policy

Tower Bridge Advisors, a Philadelphia Wealth and Asset Management firm, is registered with the SEC as a Registered Investment Advisor.

Portfolio Review

Is your portfolio constructed to meet your current and future needs? Contact us today to set up a complimentary portfolio review, using our sophisticated portfolio analysis system.

Contact

Copyright © 2023 Tower Bridge Advisors

Philadelphia Wealth & Asset Management, Registered Investment Advisors

300 Barr Harbor Drive
Suite 705
West Conshohocken, PA 19428

Phone: 610.260.2200
Toll Free: 866.959.2200

  • Why Tower Bridge Advisors?
  • Investment Services
  • Our Team
  • Wealth Management
  • Investment Process
  • Client Service
  • News
  • Market Commentary
  • Economic Update Videos
  • Contact