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The Shiller CAPE ratio stands at 38-40, the second-highest in 155 years behind only the dot-com peak of 44.19.
S&P 500's top-10 companies now make up 36-40% of market cap, nearly 50% more than 2000.
KEY POINTS
- Hyperscaler capital expenditure on AI infrastructure is projected at $660-690 billion in 2026.
- Unlike the dot-com era, leading AI companies like Nvidia are highly profitable and cash-generative.
- AI infrastructure investments hinge on future returns, with revenue concentration creating potential fragility.
- Market outcome depends on whether massive AI capex yields sustained earnings growth at current expectations.
COMPANIES
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