Strategists warn of growing bubble risks in AI stocks as tech sector outperformance hits levels last seen before the 2000 crash.
The S&P 500 Technology sector has outperformed the broader S&P 500 by the largest margin since January 2000, the month before the dot-com bubble burst. Analysts cite this as a potential warning sign for AI-driven stocks, which have surged in recent months.
DataTrek Research highlighted the comparison, noting that current valuations and sector performance mirror pre-crash conditions. Prior to the 2000 downturn, tech stocks similarly dominated market gains before a sharp correction.
Early Tuesday trading saw declines in key AI leaders like Micron and Sandisk, as South Korea led a global market rout. The sell-off underscored growing investor unease over stretched valuations in the sector.