Nvidia contributed 30% of the gains in the S&P 500 year to date.
Current AI stock valuations are lower than those during the dot-com bubble. The seven largest Nasdaq-100 stocks currently trade at an average valuation of 46 times earnings, while in March 2000, they traded at an average valuation of 80 times earnings. This suggests that the current market environment is not as overvalued as the dot-com bubble era.
The median 12-month return when the S&P 500 outperforms its equal-weight counterpart is 17.9%. This figure is based on historical data from 1971 to 2024, showing that in the 16 instances when the S&P 500 outperformed, the subsequent 12-month return had a median of 17.9%.