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AI mania is worse than 1999's tech bubble, Apollo's top economist warns
Yahoo Finance ^ | July 18, 2025 | Francisco Velasquez

Posted on 07/18/2025 11:02:45 AM PDT by lasereye

A top Wall Street economist is sounding the alarm on sky-high valuations in AI stocks — and drawing comparisons to the tech bubble of the late 1990s.

"Yes, AI will do incredible things for all of us," Torsten Sløk, chief economist at Apollo Global Management, said on Yahoo Finance's Opening Bid. "But does that mean I should be buying tech companies at any valuation?"

According to Sløk, the answer is increasingly no. In a research note to clients this week, he pointed to internal data showing the price-to-earnings ratios (P/E) of the 10 largest companies in the S&P 500 — many of them AI stock picks like Meta and Nvidia — have eclipsed P/E levels seen at the height of the dot-com bubble in 1999.

That signals a dangerous concentration of investor exposure in just a handful of tech giants, Sløk argued.

"Almost 40% of the S&P 500 is made up by the 10 largest companies," he said. "So if I take $100 as an investor and buy the S&P 500, I think I have exposure to 500 different stocks, but I'm really just betting on the Nvidia and the AI story continuing."

In his note, Sløk noted that the current valuations in megacap tech stocks, and the index as a whole, may not be sustainable. His concerns echo a growing unease on Wall Street over how much of the recent stock market rally is driven by AI euphoria and momentum trades.

BTIG analysts flagged similar warning signs in a note this week, describing market sentiment as "frothy" and raising the possibility of a near-term pullback in high-flying AI names.

Their focus was on the BUZZ NextGen AI Sentiment Index, a benchmark of AI-related stocks popular with retail investors. The index is up 45% over the past 16 weeks.

(Excerpt) Read more at finance.yahoo.com ...


TOPICS:
KEYWORDS: ai; bubble; stockmarket; webistics
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To: roadcat

Wow! From 10 to 250.

Wish I had known.


41 posted on 07/18/2025 3:36:32 PM PDT by ReganFan4ever
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To: Sequoyah101
If ad hominem attacks are the best you can do leave me alone. You are entitled to your opinions and choice of facts just as well as I am.

I did not "attack" you, I simply countered naive remarks with truth. If you are that sensitive, I am truly sorry. As for Tesla, I own stock so I follow the company closely, and have watched my holdings grow 8-fold. It is a great investment, and the company is not going to disappear anytime soon. They have greatly diversified, despite what you falsely believe. I'll leave it at that. Good luck with your investments, mine have given me a comfortable retirement.

42 posted on 07/19/2025 9:36:49 AM PDT by roadcat ( )
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To: ReganFan4ever
Wish I had known.

Still a good investment, that would be ORCL. She bought thousands for $10, currently at $246. While an IT worker one of her tasks was coding Oracle databases, and she bought stock on a whim. As AI interest grew, so did the value of Oracle AI.

43 posted on 07/19/2025 9:57:30 AM PDT by roadcat ( )
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To: roadcat

Would you buy it today at a PE of 177? It may have been a great investment when you bought it and I never said it was going to disappear.

If they have diversified so much they should make that better known because it does not show up in their prospectus or any analyst reports I found. Helping out other Musk companies that are independent of Tesla does not accumulate to the bottom line of Tesla. Of course, there is the fact that I am not at all interested in a company with a PE that is so high so I am not very motivated to investigate very hard.

As for an attack, I think you did. “Wrong, and full of FUD.” I am not wrong. Tesla does not own the other entities mentioned. Some of them do not even have public stock offerings either.

I have better things to do so, end.


44 posted on 07/19/2025 10:28:40 AM PDT by Sequoyah101
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To: Sequoyah101
As for an attack, I think you did. “Wrong, and full of FUD.” I am not wrong.

You are wrong, very very wrong. Tesla is very involved in metals research, AI, energy research, battery chemistry, mining, robotics, and other engineering fields. They don't simply buy parts and components from other companies the way other car producers do, such as GM and Ford. Tesla has vertical integration way beyond other domestic makers. They produce stuff in-house, including chips and software. How much GM stock do you own and how is that working out?

45 posted on 07/19/2025 10:47:42 AM PDT by roadcat ( )
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