Software Engineering Daily · Tuesday, September 29, 2026
Cory Doctorow explains that the persistent cycles of hype and bust in the tech sector, including the current AI boom, are driven by a material need for companies to demonstrate growth to maintain high share prices. He posits that a share is a claim on future earnings, and without growth, a company becomes overvalued, leading to panic sell-offs.
“Not because of irrational mania, but because a share is a claim on the future earnings of a company. Companies that are growing have lots of future earnings. The corollary is when your company stops growing, it's overvalued. Because its future earnings are the same or lower than they are this year.”
“And the only thing to forestall that is either growth or if you can't find growth, a story about growth.”