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Today's AI-fueled market frenzy is even more dangerously inflated than the 1990s internet bubble that ended with a historic crash in 2000.
That’s according to Apollo's chief economist Torsten Slok. This time, it's not just hype—it’s concentrated, institutional, and sitting atop the S&P 500's biggest names, he adds.
Related: The Last Time This Warning Flashed, S&P 500 Crashed The Most Since 2008
Back in 2000, the top 10 companies in the S&P 500 had a price-to-earnings (P/E) ratio of 25—lofty, but still loosely tethered to fundamentals. Today? That same top 10 group, now dominated by AI darlings like Nvidia Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT), and Alphabet Inc (NASDAQ:GOOGL) (NASDAQ:GOOG), carries a P/E of 25 once again… but with far more weight.
What's different now, Slok warns, is that the rest of the market isn't anywhere near as stretched. The top-heavy S&P is showing signs of structural imbalance—making the AI bubble both narrower and potentially more dangerous.
| Year | Top 10 (P/E) | Excluding Top 10 (P/E) | S&P 500 (P/E) |
|---|---|---|---|
| 1990 | 15 | 10 | 10 |
| 1995 | 20 | 15 | 15 |
| 2000 | 25 | 15 | 15 |
| 2005 | 15 | 15 | 15 |
| 2010 | 10 | 15 | 15 |
| 2015 | 20 | 15 | 15 |
| 2020 | 30 | 20 | 20 |
| 2025 | 25 | 20 | 20 |
While the overall S&P 500 P/E ratio sits at a seemingly reasonable 20, the ex-top-10 group has a P/E of just 20, indicating that the bulk of the valuation risk sits squarely on the backs of a few AI titans. If sentiment cracks, the fallout won't be gradual—it'll be violent.
For investors seeking to navigate the storm, ETFs provide a practical way to express their views. If you believe the bubble still has room to inflate, the Global X Robotics & Artificial Intelligence ETF (NASDAQ:BOTZ) gives exposure to a broad range of AI-focused companies.
But if you’re feeling the chill from Slok's warning, consider defensive hedges like the Invesco S&P 500 Equal Weight ETF (NYSE:RSP), which dilutes mega-cap exposure, or ProShares Short QQQ (NYSE:PSQ) to bet against the froth.
With valuations this stretched and history offering a sobering mirror, the AI trade might not end in a bang—but it could still blow up.
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