Five tests from 2000
What separated the companies that disappeared in 2000–02 from those that made it through, turned into tests on the latest filings. A company that trips a test gets a flag. Fewer flags means more staying power in a bust; it says nothing about whether the share price is cheap or will rise.
- Negative FCFIs investment paid for from earnings?
Companies spending more than their operating cash flow depend on outside money and cannot keep investing when it dries up, as the 2000 carriers found.
- Heavy debtIs the debt manageable?
Net debt (borrowings minus cash) above three years of operating cash flow counts as heavy.
- Operating lossIs the core business profitable?
Loss-making firms race their cash balance once growth stalls (Webvan, Pets.com).
- Asset-heavyIs the business too asset-heavy?
When capex exceeds 40% of revenue, a demand slump leaves large write-downs on GPUs that age within a few years.
- Richly pricedIs too much already priced in?
Price-to-earnings above 60, or, for companies without profits, price-to-sales above 20. At the 2000 peak Cisco traded at about 200 times earnings and about 30 times sales. The higher the multiple, the harder a mere slowdown hits the price.
Physical infrastructure (data centres, power)
In 2000Fibre networks and carriers
The layer in fibre's seat. But power, land and grid connections last decades and cannot be added quickly. Even if overbuilt, they are the kind of asset latecomers end up using. The risk sits with debt-funded builders and with the creditworthiness of the AI tenants on the other side of long contracts.
| Company | Business | Revenue (4Q) | Growth | Op. margin | Capex ÷ OCF | Net cash | P/E | P/S | vs 52w high | Flags |
|---|---|---|---|---|---|---|---|---|---|---|
| VertivVRT | Power and cooling for data centres | $11bn | +26% | 19% | 13% | -$0.1bn | 56x | 8.5x | -33% | None |
| VistraVST | Texas-centred generator betting on data centre demand | $19bn | +4% | 19% | 56% | -$19bn | 21x | 2.4x | -34% | Heavy debt |
| Constellation EnergyCEG | Nuclear-heavy generator with long-term data centre contracts | $31bn | +26% | 15% | 93% | -$19bn | 27x | 3.0x | -35% | Heavy debt |
Chips and networking gear
In 2000Telecom gear (Cisco, Lucent, Nortel)
Cisco's seat in 2000. It is the most profitable layer today, but its revenue is its customers' capex, and it stops when they stop. Even the pick-and-shovel survivors of 2000 lost 80–90%. Investing in customers to support demand has the same shape as Lucent's and Nortel's customer financing.
| Company | Business | Revenue (4Q) | Growth | Op. margin | Capex ÷ OCF | Net cash | P/E | P/S | vs 52w high | Flags |
|---|---|---|---|---|---|---|---|---|---|---|
| NVIDIANVDA | Leading AI GPU maker; in Cisco's 2000 seat | $303bn | +104% | 65% | 5% | — | 28x | 17.9x | -5% | None |
| AMDAMD | GPUs and CPUs; gave OpenAI share warrants alongside a large order | $41bn | +49% | 16% | 17% | $9.9bn | 160x | 24.9x | 0% | Richly priced |
| BroadcomAVGO | Custom AI chips for hyperscalers and networking silicon | $89bn | +56% | 48% | 3% | -$35bn | 44x | 18.9x | -27% | None |
| MicronMU | High-bandwidth memory for AI | $90bn | +188% | 66% | 49% | $21bn | 24x | 13.5x | -11% | None |
| Arista NetworksANET | Data centre switches; the closest business to Cisco's | $11bn | +33% | 43% | — | $13bn | 64x | 24.7x | -2% | Richly priced |
Cloud and compute landlords
In 2000Hosting and data centres (Exodus etc.)
The main spenders. Giants with profitable core businesses can cut back and ride out a bust, as Microsoft and Oracle did in 2000. The ones that look like the 2000 carriers are the debt-funded GPU clouds and anyone spending beyond their earnings.
| Company | Business | Revenue (4Q) | Growth | Op. margin | Capex ÷ OCF | Net cash | P/E | P/S | vs 52w high | Flags |
|---|---|---|---|---|---|---|---|---|---|---|
| MicrosoftMSFT | Azure; a major OpenAI shareholder | $332bn | +18% | 47% | 63% | $37bn | 29x | 11.6x | -5% | None |
| AmazonAMZN | AWS; an investor in Anthropic | $776bn | +16% | 12% | 107% | -$10bn | 20x | 3.5x | -12% | Negative FCF |
| AlphabetGOOGL | Google Cloud, its own chips (TPU) and models (Gemini) | $446bn | +20% | 33% | 71% | $142bn | 17x | 9.4x | -15% | None |
| OracleORCL | Reported ~$300bn five-year compute deal with OpenAI (Sept 2025) | $72bn | +22% | 32% | 161% | -$92bn | 22x | 5.8x | -56% | Negative FCFAsset-heavy |
| CoreWeaveCRWV | GPU cloud upstart funding its fleet largely with debt | $7.6bn | +115% | -3% | 298% | -$19bn | Loss | 6.4x | -39% | Negative FCFOperating lossAsset-heavy |
Services and applications
In 2000Portals and e-commerce (Yahoo, Amazon, Pets.com)
In 2000 the eventual winners came from this layer, because they got to use the compute that became cheap after the bust. The winners may still be small, private or not yet founded (Google started in 1998, Facebook in 2004). The model makers (OpenAI, Anthropic) are private and not in the figures here.
| Company | Business | Revenue (4Q) | Growth | Op. margin | Capex ÷ OCF | Net cash | P/E | P/S | vs 52w high | Flags |
|---|---|---|---|---|---|---|---|---|---|---|
| Meta PlatformsMETA | Uses AI in ads; its own models (Llama) and giant data centres | $228bn | +28% | 38% | 69% | $6.6bn | 28x | 8.5x | -3% | None |
| SalesforceCRM | Business software selling AI agents on top | $44bn | +11% | 20% | 4% | -$28bn | 20x | 4.4x | -12% | None |
| ServiceNowNOW | Workflow automation software | $15bn | +22% | 11% | 14% | -$0.8bn | 84x | 9.5x | -28% | Richly priced |
| AdobeADBE | Creative software; also exposed to generative AI substitutes | $26bn | +15% | 36% | 2% | $0.9bn | 13x | 3.5x | -35% | None |
| PalantirPLTR | Data analytics and AI deployment | $6.2bn | +79% | 43% | 1% | $9.4bn | 151x | 74.0x | -8% | Richly priced |
How to read this
Figures are the latest four quarters reported to the SEC (fiscal periods ending May 2026 to Aug 2026). Net cash is cash and short-term investments minus borrowings; lease liabilities are not counted as debt. P/E (trailing four quarters of net income) and P/S use the latest share price and share count; forward earnings estimates are not free to obtain, so P/E is backward-looking. Foreign companies (TSMC, ASML, Japanese names) and private model makers are not included.
This is not investment advice. The flags describe how a company would weather a bust, not whether its shares are a buy.
Updated 28 Sep 2026 10:50 JST · prices to 25 Sep 2026