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Investing.com -- Apollo Global Chief Economist Torsten Sløk is sounding the alarm on what he sees as an even more inflated market than the one that led to the dot-com crash. In a striking warning today, Sløk said, “The difference between the IT bubble in the 1990s and the AI bubble today is that the top 10 companies in the S&P 500 today are more overvalued than they were in the 1990s.” His comments come as stocks continue to reach new highs, with investors increasingly betting big on artificial intelligence as the next transformative force in global markets.
The enthusiasm has driven tech giants like NVIDIA (NASDAQ:NVDA), Microsoft Corporation (NASDAQ:MSFT), and Meta (NASDAQ:META), among others, to record-breaking valuations, with NVIDIA recently becoming the first company to trade over the $4 trillion valuation level.
Slok highlights that the top 10 stocks have disproportionately high valuations relative to the overall market. Sløk argues that this extreme concentration and the sky-high expectations built into prices mirror and surpass the late-1990s mania, when investors poured money into internet stocks with little regard for profitability.
Unlike the IT bubble, today’s top companies are highly profitable, but Sløk cautions that even strong fundamentals can’t justify unlimited multiples.
As AI fever continues to spread from Silicon Valley to Wall Street, Sløk’s warning serves as a sobering counterpoint to the hype. Whether his fears prove prophetic or overly cautious, his message is clear: this is not the 1990s but potentially something bigger, and riskier.
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