Investors keep hearing that the stock market is currently in a major bubble. At the present time, the Dow, S&P 500 and NASDAQ are effectively up against all-time highs. So the present time has to represent a stock market bubble that’s ready to burst. Right? That may not be the case at all.
Oggonomics has noticed that the theme of articles around “bubbles” always seems to be higher when markets are at all-time highs. And, again, the major U.S. equity indexes are effectively at all-time highs. The financial media (and mainstream media) often write stories and have full length videos predicting “bubbles” in nearly the same manner as they predict the next “stock market crash” when the markets are selling off or when the economy is weakening.
Before you panic and sell all of your stocks, please do not forget that the stock market is actually a market of stocks rather than a single stock market. Sure, there are ETFs like the SPY, QQQ and DIA that cover the broad market and which dominate the daily inflows and outflows into the stocks that make (and dominate) each index. And current valuations of many stocks today by many metrics have reached such lofty levels that the “Dot-Com bubble” of 25 years ago looks like those stocks were cheap.
Oggonomics is not trying to predict that stocks are in a major bubble. It is also not ignoring that many valuation metrics have blown through historical norms – and then some. The reality is that there are also many opportunities for investors at the present time. And investors can easily hedge their portfolios against any would-be market crash or bubbles. It’s really not difficult.
According to a fresh report from Goldman Sachs, the global equities market has some characteristics of an early-stage bubble. Peter Oppenheimer, Goldman Sachs Research’s chief global equity strategist, has also opined that stocks overall are not yet in a bubble.
There are many issues addressed. Oppenheimer’s report does address valuation excess, accelerating M&A activity, concentration, lofty IPO valuations, and investor exuberance. That said, Goldman Sachs Research also shown that there are key differences today versus past bubbles and that several classic signs of an unsustainable bubble are missing.
And Oppenheimer’s take even addresses the present lofty valuations specifically around AI:
While investor enthusiasm about artificial intelligence (AI) has been driving up valuations for technology companies, those metrics are based on strong fundamentals rather than speculation. AI is a source of investors’ exuberance, but the sector is led by established firms rather than an array of poorly capitalized startups.
The Wall Street Journal’s James Mackintosh has just published ‘Why Bubbles Can Keep Inflating in Plain Sight.’ The tagline is “Bulls hope incessant bubble talk is a contrarian signal to buy AI stocks. It isn’t.” Scary, right? Maybe. Maybe not.
Now take a look at a search of “bubble” on the Barron’s website. It is loaded up with articles addressing bubbles at the present time, some preaching bubbles and some refuting bubbles. Here are their latest headlines:
- These 11 Stocks Are Probably in a Bubble. It’s Time to Get Out.
- A Drone Bubble? For Defense Stocks, the Answer Had Better Be No.
- Why the Stock Market ‘Bubble’ Could Last for Years
- AI Stocks and Gold Might Be a Bubble. The Rest of the Market? Not So Much.
- The AI Bubble Won’t Just Take Down the Stock Market. It Will Hammer the U.S. Economy, Too.
- TSMC Earnings Beat Estimates. What That Says About an AI Bubble.
- How to Stay Invested in Stocks and Protect Yourself From a Bubble
- Worried About a Crash? Here’s What You Should Be Worried About Instead.
- Gold Could Hit $5,000, Strategist Says. Why Others Are Worried About a Crash.
- AI Is Driving Growth. But It Isn’t the Only Game in Town.
- AI Isn’t the Dot-Com Bubble, but That Won’t Stop It From Ending Badly.
The long and short of the matter is that even the great Barron’s, which some of us consider as “the Financial Bible,” has many pro-bubble and counter-bubble views.
S&P Global has also opined about bubbles in many cases. The report ‘US stocks soar to new highs as fears of bubble bursting rise’ was dated July 21, 2025. Another report titled ‘A Different Kind of Bubble’ was served up on relevance but was from January of 2021.
The world is now hooked on AI, so Oggonomics wanted to ask the two leading AI platforms… “Is the stock market in a bubble?” Please be advised that AI results will vary drastically, often depending on a given day and as news and data change.
ChatGPT’s “Final Verdict”… Yes — there are strong signals that parts of the stock market are behaving like they are in bubble territory. But: it’s not definitive that the entire market is a classic speculative bubble yet, or that a crash is imminent. The truth may lie somewhere in between: “very expensive market, elevated risk, but still some underlying fundamental support”.
Claude’s “Bottom Line”… Most analysts see elevated valuations and bubble-like characteristics, particularly in AI-related tech stocks, but haven’t declared it a full bubble yet due to strong underlying fundamentals. However, many expect increased volatility or a correction in the coming 1-2 years.
Oggonomics always reminds its readers that no single analyst report should ever be the sole reason to buy or sell a stock. That’s also true regarding picking and choosing which article or report is addressing “bubbles.”
As 2025 begins to look into 2026, keep some of these metrics in mind:
- The S&P500 +15.5% YTD, NASDAQ-100 +20.7% YTD and DJIA +11% YTD have all hit fresh highs.
- The Magnificent 7 (or even the Mag-10) have only continued to dominate the overall weighting of the indexes.
- Gold was up over 50% YTD, surging to all-time highs of nearly $4,400 in October.
- Silver has pulled back from its all-time high above $54 per ounce, but it was still up 67% YTD.
- Bitcoin recently and briefly hit an all-time high above $125,000 before its latest pullback (or “crash” according to crypto bros).
- The U.S. Treasury’s Debt to the Penny site confirmed that the “Total Public Debt Outstanding” has just hit an astounding record $38 trillion.
- And the U.S. M2 Money Supply hit a record $22.195 trillion in August 2025, up from the $21.75 trillion peak in April/2022 during the prior growth cycle — and versus the pre-Covid peak of $15.467 trillion measured in Feb/2020.
There are always some bubbles to find. The so-called “meme stocks” trade at valuations that are almost impossible to explain. Many of the more speculative AI stocks have not yet proven themselves, and the two AI leaders are still private. The four top pure-play speculative quantum computing stocks had combined market caps over $50 billion without even $50 million in total sales (and no real working product sales). It is easy to find biotechs worth billions without any sales at present and many without expected sales for years.
There are many great companies and great sectors with low valuations. Auto leaders and banking giants are still valued 8-times to 12-times earnings. Some great communications leaders and telecom giants are valued at less than 10-times earnings, with similar valuations still found in utilities. Ditto for the top airlines, many great food and beverage leaders, and many of the top insurance and healthcare providers. Are those bubble valuations?
Private collectors and investors pay tens of millions to over $100 million for great works of art. Rare sports cards are now routinely selling for over $1 million, some even valued above $10 million. The top five cryptocurrencies are valued will above $3 trillion –
With all that said, investors in a year will undoubtedly look back and say that there were bubbles looking back at the present time. They will also likely find that many parts of the entire market of stocks, as well as other assets, wasn’t a bubble. And there will probably be a lot of regrets for not buying some assets just because articles were so convincing that the “everything bubble” meant everything had to crash.
If investors are ever really worried bubbles and the next crash, the market offers solutions. Investors can buy put options to protect against falling prices. Investors can always start to trim positions after big gains rather than selling out entirely.
And, lastly, remember one of the mantras of Oggonomics — “Always a bull, you’re a fool. Always a bear, you’re broke!”
