The S&P 500 Shiller CAPE ratio nears historic highs, sparking comparisons to the 2000 tech bubble amid AI-driven market volatility.
The S&P 500’s Shiller CAPE ratio, a long-term valuation measure, has climbed to levels not observed since the dot-com bubble. The metric, which adjusts for 10-year inflation-adjusted earnings, currently signals elevated valuations compared to its long-term average of 17.
Recent market turbulence has weighed on tech stocks, with the Nasdaq Composite down over 4% from its peak and the PHLX Semiconductor Index nearing a 20% decline. Bank of America’s survey shows 43% of fund managers view AI stocks as overvalued, though opinions remain divided.
While the ratio does not guarantee an imminent crash, it underscores growing concerns about stretched valuations in a market driven by AI enthusiasm.