Experts warn: Big Tech dominates the stock market - is there a risk of a new dot-com bubble?

Experts warn: Big Tech dominates the stock market - is there a risk of a new dot-com bubble?

According to a report by www.finanzen.net,

Experts at JPMorgan have noted alarming parallels between the current stock market, dominated by Big Tech, and the dot-com bubble. The market shows a similarly high concentration of top stocks as during the dot-com bubble. Various factors such as the number of industries, valuations and earnings yield of the top 10 stocks were also analyzed and indicate possible overheating of the market.

The top 5 stocks accounted for 21.7 percent of the MSCI USA Index at the end of 2023, while the share of the top 10 rose to 29.3 percent. This suggests high concentration, comparable to the dotcom days. In addition, fewer different industries are represented in the top 10 and the ratings are still at a high level. The earnings yield of the top 10 stocks is also significant. The experts warn that Big Tech could be in for a period of underperformance, similar to what happened in 2022.

Other analysts, such as Société Générale, are also warning of a possible bubble in the US tech market. They also draw parallels to the dot-com bubble and highlight the potential risks to the entire market.

These warnings should be taken seriously as they are based on sound analysis and may have potential implications for the market and the financial industry. Investors should therefore pay particular attention to developments in the Big Tech sector in order to identify possible risks at an early stage.