Same pattern

The S&P 500 is experiencing its largest outperformance against its equally weighted counterpart since the internet bubble. Since the launch of ChatGPT in November 2022, the S&P 500 has gained 118%, compared to 67% for the equally weighted index. A gap of more than 50 percentage points.
During the internet bubble, the difference reached 68 percentage points. History does not repeat itself, but the similarities are worth looking at. A handful of technology giants are driving most of the markets performance.
There is one important difference: todays technology leaders generate substantial earnings and cash flows. But this does not mean that any price is justified. I remain convinced that AI will transform our economies. Whether investors will make money at current valuations is another question.
For us, this is another argument to look beyond the large US technology companies. There are plenty of good businesses trading at much more reasonable valuations. Price matters. It always has.