💥 Are We in Another Market Bubble?
All-time highs. Frothy markets. Sky-high valuations. Those headlines alone are enough to make investors nervous—especially when people start whispering “bubble” and comparing today’s markets to the dot-com crash of the late 90s. But before you panic, let’s hit pause.
🤖 The AI Revolution and Market Growth
ChatGPT’s release in 2022 kicked off the AI investing wave, helping drive the S&P 500 up more than 75% in just three years. Optimism over artificial intelligence has investors expecting another technological revolution—similar to how the internet once promised to change everything.
📊 Valuations: High, But Not Irrational
The S&P 500’s forward price-to-earnings ratio sits around 22.2, lower than the 23.8 seen during the dot-com bubble and even below late 2020 levels. This means valuations are elevated but not extreme—and reflect much stronger corporate earnings than we saw in the 90s.
💼 Why the AI Boom Is Built on Real Cash Flow
According to LPL Research, the biggest difference between then and now is how companies are investing. Today’s tech leaders are using strong profits and cash flow to fund AI expansion, not speculative borrowing or stock issuance like during the dot-com days.
📈 What This Means for Investors
LPL’s conclusion? The AI rally is better capitalized, more profitable, and far more durable than the 1990s internet boom. That doesn’t mean volatility won’t happen—but it does mean today’s growth has a stronger foundation.
🛡️ The Smart Move: Stick to Your Plan
Fear should never drive your investment decisions. The best way to counter emotional investing is with a diversified portfolio and a written financial plan—so you can stay focused on long-term goals rather than market noise.
Securities are offered through LPL Financial, Member FINRA/SIPC. GenWealth Financial Advisors is an other business name of Independent Advisor Alliance, LLC. All investment advice is offered through Independent Advisor Alliance, LLC, a registered investment adviser. Independent Advisor Alliance, LLC is a separate entity from LPL Financial.
