The Trump bull market is approaching a tipping point, with the S&P 500's Shiller price-to-earnings ratio reaching 42.84 earlier this month, just 3.5% below the dot-com bubble peak of 44.19 in December 1999. The Shiller P/E, which averages inflation-adjusted earnings over 10 years, has exceeded 30 only six times in 155 years, and each prior instance led to declines of 20% to 89% in major indexes. The Dow, S&P 500, and Nasdaq have risen 18%, 24%, and 32% since President Trump's January 2025 inauguration, driven by artificial intelligence, record buybacks, and strong earnings. However, historical patterns show that game-changing innovations like AI often experience early-stage bubbles, and AI stocks now represent roughly 40% of the market, echoing past boom-bust cycles.
NVIDIA CorporationArticle warns of overvaluation and potential bubble burst, with AI stocks representing 40% of market, but no specific news about NVIDIA.