Top 10 US stocks valuation is now higher than during the 1990s Dot-Com Bubble
Top 10 US stocks valuation is now higher than during the 1990s Dot-Com Bubble
Is the stock market in a bubble again after 24 years since the last burst?
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The forward Price to Earnings (P/E) ratio of the top 10 S&P 500 stocks combined is now 27x, the 2nd highest in at least 3 decades. It is only below 29x recorded before the COVID crash.
Valuations are even higher than in the 1990s Dot-com bubble when the top 10 saw 24x forward P/E.
As a reminder, the top 10 stocks account for almost 40% of the S&P 500 market capitalization. In other words, if they go up the S&P 500 goes up, if they start to correct then they will drag down the entire index with them.
Is the US stock market forming a new bubble or it is already in a bubble? How to invest in such an environment? You can read the full analysis below:
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