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  • Is the AI boom a bubble waiting to pop? Here’s what history says | Fortune

    As the artificial intelligence trade continues to push the stock market to new highs, investors are increasingly asking if we’re living through another financial bubble that’s destined to burst. 

    The answer isn’t so simple, at least according to history.

    The S&P 500 Index jumped 16% in 2025, with AI winners Nvidia Corp., Alphabet Inc., Broadcom Inc. and Microsoft Corp. contributing the most. But at the same time, concerns are mounting about the hundreds of billions of dollars Big Tech has pledged to spend on AI infrastructure. Capital expenditures from Microsoft, Alphabet, Amazon.com Inc. and Meta Platforms Inc. are expected to rise 34% to roughly $440 billion combined over the next year, according to data compiled by Bloomberg. 

    Meanwhile, OpenAI has committed to spending more than $1 trillion on AI infrastructure, an eye-popping number for a closely held company that isn’t profitable. But perhaps even more troubling is the circular nature of many of its arrangements, in which investments and spending go back and forth between OpenAI and a few publicly traded tech giants.

    Throughout history, over-investment has been a common theme when there’s a technological advancement that will transform society, according to Invesco chief global market strategist Brian Levitt, who pointed to the development of railroads, electricity and the internet. This time may be no different.

    “At some point the infrastructure build may exceed what the economy will need over a short period of time,” he said. “But that doesn’t mean that the rail tracks weren’t finished or the internet didn’t become a thing, right?”

    Still, with equity valuations creeping up and the S&P 500 just posting its third straight year of double-digit percentage gains, it makes sense that investors are growing concerned about how much upside is left and how much market value could be lost if AI doesn’t live up to the hype. Nvidia, Microsoft, Alphabet, Amazon.com, Broadcom and Meta Platforms account for almost 30% of the S&P 500, so an AI selloff would hit the index hard.  

    “A bubble likely crashes on a bear market,” said Gene Goldman, chief investment officer at Cetera Financial Group, who doesn’t believe AI stocks are in a bubble. “We just don’t see a bear market anytime soon.” 

    Here’s how today’s AI boom stacks up against previous market bubbles. 

    Pace, Length

    One simple way of gaging whether the AI-fueled tech rally has gone too far or too fast is to compare it against past bull runs. Looking at 10 equity bubbles from around the world since 1900, they lasted just over two-and-a-half years on average with a trough-to-peak gain of 244%, according to research by Bank of America strategist Michael Hartnett.

    By comparison, the AI-driven rally is in its third year, with the S&P 500 rising 79% since the end of 2022 and the tech-heavy Nasdaq 100 Index gaining 130%. 

    While it’s difficult to draw any conclusions from the data, Hartnett warns investors against fleeing the stock market even if they believe it’s in a bubble because the last stretch of the rally is typically the steepest, and missing out would be costly. One way to hedge is to buy cheap value plays like UK stocks and energy companies, he said.

    Concentration

    The S&P 500’s 10 biggest stocks now account for roughly 40% of the index, a level of concentration not seen since the 1960s. That has put some investors off, including Wall Street research veteran Ed Yardeni, who said in December that it no longer makes sense to recommend overweighting tech stocks.

    Market historians argue that, while the concentration seems extreme relative to recent memory, there are precedents. Top stocks as a share of the US market were at similar levels in the 1930s and 1960s, according to London Business School professor Paul Marsh, who studied the past 125 years of global asset returns. In 1900, 63% of US market value was tied to railroad stocks, compared with 37% tied to technology at the end of 2024, Marsh said.

    Fundamentals

    Asset bubbles tend to be much harder to spot in real time than after the fact because fundamentals are usually at the center of the debate, and the metrics investors focus on can be fluid, according to TS Lombard economist Dario Perkins. 

    “It is easy for tech enthusiasts to claim that ‘it’s different now’ and that fundamental valuations will never be the same again,” he said.

    But some fundamentals are always important. For example, compared with the dot-com bubble, today’s AI giants have lower debt-to-earnings ratios than, say, WorldCom Inc. And companies like Nvidia and Meta Platforms are already reporting strong profit growth from AI, which wasn’t necessarily the case in the speculative era 25 years ago.

    The potential for credit risk in the AI trade is making some investors nervous. After Oracle Corp. sold $18 billion in bonds on Sept. 24, the stock plunged 5.6% the next day and it’s down 37% since then. Meta, Alphabet and Oracle will need to raise $86 billion combined in 2026 alone, according to an estimate by Societe Generale. 

    Valuations

    The S&P 500’s valuation is the highest it’s ever been except for the early 2000s, at least according to its cyclically adjusted price-to-earnings ratio, a metric invented by economist Robert Shiller that divides a stock price by the average of its inflation-adjusted earnings over the past 10 years. 

    Bullish investors argue that while market valuations are rising because of tech, the pace of increase is much slower than the dot-com era. At one point in 2000, Cisco Systems Inc. was priced at over 200 times its previous 12 months of earnings, while Nvidia is at less than 50 times today. 

    Stock prices decouple from earnings growth in an environment where there’s no debate on valuations, according to Richard Clode, a fund manager at Janus Henderson. “We’re just not seeing that currently as yet,” he said.

    Investor Scrutiny

    Discussions of a potential stock bubble percolated throughout the year but picked up significantly in November and December amid warnings from investor Michael Burry and the Bank of England. More than 12,000 stories in November mentioned the phrase “AI bubble,” roughly equal to the prior ten months combined, according to data compiled by Bloomberg.

    Investors see an AI bubble as the biggest “tail risk” event, a December poll by Bank of America showed. More than half of the respondents said the Magnificent Seven tech stocks were Wall Street’s most crowded trade.

    This contrasts with the dot-com bubble, when there was “complete excitement about the internet revolutionizing everything,” said Venu Krishna, head of US equity strategy at Barclays. And the questions about whether AI investments will pay off are increasing as the debt issuance rises.

    “I wouldn’t brush it off, but I would generally think that scrutiny is healthy,” he said. “In fact, that scrutiny is what will prevent extreme moves like a crash.”

    Henry Ren, Carmen Reinicke, Bloomberg

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  • Michael Saylor’s Strategy flirts again with the danger threshold at which his company is worth less than his Bitcoin | Fortune

    Stock in Michael Saylor’s Bitcoin treasury company Strategy was up 1.22% in early trading today, giving the company a brief period of relief. The stock has declined 66% since its high last July, and this morning its “mNAV”—a technical gauge of whether the company is worth more or less than the Bitcoin it holds—was at 1.02. 

    If that gauge falls below 1, then technically the company is worth less than the Bitcoin it owns. At that point, the stock would be sold off by many investors because there is no point in owning a stock whose value is based on Bitcoin if the stock is worth less than the Bitcoin. 

    The stock has been sitting above this danger zone since November.

    Already, the market cap of the company is worth less than its Bitcoin. Its market cap was $47 billion today; the Bitcoin held by the company is worth just under $60 billion. That on its own is a perilous position. But if the company’s mNAV (“market-to-net asset value”) falls below 1 then the stock potentially enters a new world of pain. mNAV is a measure of the company’s total market cap plus its debt, minus its cash, divided by its total Bitcoin reserve. If that value is worth less than 1 then the case for owning Strategy stock becomes harder to argue.

    Fortune contacted the company for comment.

    Saylor, as usual, has been tweeting bullishly about MSTR shares, including this chart showing that “open interest” (investor positions that have not been closed out) are the equivalent of 87% of the company’s market value. The implication is that the stock is highly traded (although many of those positions are undoubtedly short bets against the company). He also posted an AI-generated picture of him taming a polar bear.

    Below the level of mNAV at 1 lies another dangerous threshold for Strategy: the average price at which Strategy has historically accumulated Bitcoin. Over the years, that price was about $74,000 per coin. Currently, Bitcoin trades at $89.6K. If the price were to fall below $74K it would imply that Strategy’s Bitcoin stash was worth less than what Saylor has paid for it.

    Strategy fans would argue that might be a time to buy—if the stock was worth less than its Bitcoin then the price per share might rise to meet the price of Bitcoin; it might rise even more if Bitcoin resumed its march higher.

    But that, again, would be a sore test for traders who are not true believers. Why hold a stock that is worth less than the underlying asset it represents?

    Join us at the Fortune Workplace Innovation Summit May 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

    Jim Edwards

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  • The bulls are too bullish: Bank of America warns 200-plus fund managers just triggered a contrarian ‘sell’ signal | Fortune

    Bank of America’s “Bull & Bear Indicator” rose from 7.9 to 8.5 in the last few days, triggering its contrarian “sell” signal for risk assets, according to a note from analyst Michael Hartnett and his colleagues seen by Fortune this morning. The indicator is derived from BofA’s regular fund manager survey, which asks 200-plus investment managers about their appetite for risk. The logic of the Bull & Bear Indicator is that when everyone in the market is bullish, it’s time to leave.

    S&P 500 futures were up 0.25% this morning. The last session closed up 0.79%. The index remains a little less than 2% beneath its all-time high. Markets in Asia largely closed up this morning. Europe and the UK were flat in early trading. Whether stocks are overvalued—especially tech stocks—has been a running theme in the equity markets all year long. 

    BofA’s sell signal has been activated 16 times since 2002, Hartnett says. On average, the MSCI All Country World Index (an index that represents stocks globally) declined by 2.4% afterwards, the bank says, with a maximum average drawdown of 8.5% by three months later.

    The indicator has a record of being right 63% of the time—so it isn’t flawless. But BofA also notes that investors are in an unusually “risk-on” mood in equities right now: Last week saw a record inflow of $145 billion into equity exchange-traded funds, and the second-highest ever weekly inflow of money into U.S. stocks ($77.9 billion), Hartnett wrote. The indicator thus implies that a smart investor might want to become fearful given that others are too greedy.

    Investor sentiment roughly correlates with sentiment in the Purchasing Managers Index, a survey of supply chain managers responsible for corporate buying. Right now, investors have broken ranks with the PMI, with the former being much more positive about future than the latter. They appear to be expecting the PMI to follow their lead, Hartnett argues.

    “Investors [appear to be] bull positioned for ‘run-it-hot’ PMI & [earnings per share] acceleration on rate cuts, tariff cuts, tax cuts,” he told clients.

    Conversely, assuming the market does not pull back—or a revesal is temporary—he predicts EPS growth of 9% for stocks in 2026 despite increased U.S. unemployment, and the threat of “bond vigilantes slowing [the] AI capex boom.”

    Here’s a snapshot of the markets ahead of the opening bell in New York this morning:

    • S&P 500 futures are up 0.33% this morning. The last session closed up 0.79%. 
    • STOXX Europe 600 was flat in early trading. The U.K.’s FTSE 100 was flat in early trading. 
    • Japan’s Nikkei 225 was up 1.03%. 
    • China’s CSI 300 was up 0.34%. 
    • The South Korea KOSPI was up 0.65%. 
    • India’s NIFTY 50 was up 0.59%. 
    • Bitcoin was at $88K.
    Join us at the Fortune Workplace Innovation Summit May 19–20, 2026, in Atlanta. The next era of workplace innovation is here—and the old playbook is being rewritten. At this exclusive, high-energy event, the world’s most innovative leaders will convene to explore how AI, humanity, and strategy converge to redefine, again, the future of work. Register now.

    Jim Edwards

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  • U.S. stocks lift on the last day of November as Wall Street eagerly awaits the results of Black Friday | Fortune

    U.S. stocks opened with gains on the final trading day of November.

    The S&P 500 rose 0.2% and needs a slightly larger gain to avoid its first down month since April. The Dow Jones Industrial Average rose 138 points, and the Nasdaq gained 0.3%.

    Coinbase Global added 3.6% as bitcoin rose above $92,000 after dropping to around $81,000 last week. The world’s most popular cryptocurrency is still well below its all-time high of around $125,000 set in early October.

    Most tech stocks posted gains, with Meta Platforms rising 1.4% and Micron Technology adding 2.8%. But Nvidia, the market’s most valuable stock, fell 1% and is headed for a double-digit loss for the month. Oracle another high-flyer that struggled this month, fell 2.3%.

    Wall Street is operating on an abbreviated schedule Friday after being closed for the Thanksgiving holiday. Stock trading closes at 1 p.m. ET.

    Earlier, futures for the Dow Jones Industrial Average, S&P 500 and Nasdaq were halted for hours due to a technical issue at the Chicago Mercantile Exchange. CME said the problem was tied to an outage at a CyrusOne data center.

    After slumping earlier this month as investors worried that many of the tech stocks that were propelled higher by the frenzy over artificial intelligence, stocks have risen for four straight trading sessions on hopes the Federal Reserve will again cut interest rates at its meeting next month.

    Recent comments from Federal Reserve officials have given traders more confidence the central bank will again cut interest rates at its meeting that ends Dec. 10. Traders are betting on a nearly 87% probability that the Fed will cut next month, according to data from CME Group.

    The central bank, which has already cut rates twice this year in hopes of shoring up the slowing job market, is facing an increasingly difficult decision on interest rates as inflation rises and the job market slows. Cutting interest rates further could help support the economy as employment weakens, but it could also fuel inflation. The latest round of corporate earnings reports was mostly positive, but economic data has been mixed.

    The minutes of the Fed’s most recent meeting in October indicate there are likely to be strong divisions among policymakers about the Fed’s next step.

    Treasury yields held mostly steady, with the 10-year yield at 4.01%.

    In European trading, Germany’s DAX rose 0.3% as traders awaited inflation data set to be released later in the day.

    Britain’s FTSE 100 edged up 0.3% on gains in energy and mining stocks. The CAC 40 in France also rose 0.2%.

    In Asia, Japan’s Nikkei 225 closed 0.2% higher to 50,253.91, rebounding from losses earlier in the day. Data showed Japan’s housing starts rose 3.2% in October from the same period a year ago, the first annual increase since March. The number defied market expectations of 5.2% decline and reversed a 7.3% drop in September.

    South Korea’s Kospi dropped 1.5% after the country’s industrial production fell 4% month-on-month in October, more than the 1.1% decline in September.

    The Associated Press

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  • ‘Dr. Doom’ Nouriel Roubini breaks with the crowd on the AI bubble, saying the U.S. is headed for a ‘growth recession’ and not a market crash | Fortune

    For nearly two decades, esteemed economist Nouriel Roubini has worn the nickname “Dr. Doom” with honor. He earned it in the mid-2000s for warning of a housing crash that Wall Street dismissed, until he was proven catastrophically right. 

    Since then, the NYU Stern School of Business professor emeritus has become one of the most recognizable bears in global finance, regularly sounding alarms about debt spirals, geopolitical shocks, pandemics, AI disruptions, and what he once called “the mother of all crises.”

    So it’s perhaps surprising, even disorienting, that in the midst of investors teetering on the edge of a bear market, Roubini is breaking with his cohort — including fellow 2008-financial-crisis-prophet Michael Burry — to dismiss their pessimism about the U.S. economy as misplaced.

    In a new essay for the Financial Times, the economist argues that the conventional view – that America’s “Liberation Day” tariffs would trigger stagflation, tank the stock market, kneecap the dollar, and end U.S. exceptionalism — is simply wrong. Instead, he sees something close to the opposite: a short period of cooling growth, followed by a powerful rebound led by technology and capital spending that keeps the U.S. firmly in the top spot.

    “The now common view that the U.S. stock market is in a massive bubble and bound to crash is incorrect over the medium term,” he wrote. On the other hand, what he predicted isn’t necessarily the rosiest. The near-term picture looks like a “growth recession,’ he said, meaning slower, below-potential GDP. It’s not the hard landing or 1970s-style stagflation many have predicted, and it isn’t a bubble popping, but it’s a lopsided economy, as many Wall Street analysts have also noticed.

    Tariffs won’t topple the recovery

    Roubini, who once warned of a “mega-threatened age” – the era where AI, aging populations and global instability threatened our prosperity — now argues the most extreme fears about tariffs and policy missteps haven’t materialized. That’s partly because, he says, this administration is responsive to market reactions. When asset prices slumped immediately after the tariff announcement, the administration “blinked,” softening policy and opening the door to more conventional trade negotiations.

    By next year, he says, growth will reaccelerate. The Fed is undergoing a period of monetary easing, fiscal stimulus is still flowing, and—critically—AI-related capital expenditure continues to surge.

    Roubini’s arguments align closely with two of Wall Street’s top analysts: Torsten Slok from Apollo Global Management and Mike Wilson from Morgan Stanley. Slok, known for his “Daily Spark,” combining insightful charts with brevity, argued on November 20 that the economy is “likely to reaccelerate in 2026.” Just days earlier, he had warned of inequality, saying “it is a K-shaped economy for U.S. consumers.” He has also flagged extreme concentration and valuations in the stock market, with the Magnificent 7 running far ahead of the rest of the market. 

    Wilson, chief equity strategist for Morgan Stanley, has been predicting a “rolling recession” for years, arguing that different sectors of the economy shrank at different times, resulting in something that felt like a recession, but unevenly distributed. This changed in April 2022, when a “rolling recovery” set in, he has argued since then, forecasting an economic boom ahead. Wilson has argued for the possibility of a correction in stocks but, like Roubini, does not see a crash as imminent. 

    Tech > tariffs

    The core of Roubini’s argument rests on a simple hierarchy: tariffs and policy noise are temporary, but technological leadership that results in innovation compounding over decades is not.

    “Tech trumps tariffs,” he writes.

    He estimates U.S. potential growth could double from 2% to 4% by the end of the decade, powered by innovation in AI and machine learning, robotics, quantum computing, commercial space, and defense technology. While this agrees with many Wall Street predictions (Goldman Sachs sees real potential growth reaching 2.3% in the early 2030s, for instance), the prediction of 4% blows most others out of the water. 

    However, those industries, Roubini argues, will continue to deliver the “exceptionalism” that has set the U.S. apart for the past 20 years, to the extent to which productivity will boost the economy out double-digits. 

    If potential growth rises, he says, equity returns should, too. When growth averaged only 2% over the last two decades, annual returns still hovered in the double digits. Faster growth means even faster earnings expansion, and valuations that look elevated today may be supported rather than speculative.

    Roubini has been striking a more positive tone for about a year now — in August 2024, while everyone feared a downturn was coming and frustrated that the Fed wouldn’t ease, he calmed market fears again. 

    Debt—and the dollar—look less dangerous than feared

    One of the most persistent fears around AI-driven spending is debt sustainability. But Roubini argues that this math would change if growth rises even modestly.

    The Congressional Budget Office projects debt-to-GDP soaring under 1.6% real growth assumptions. But if growth averages 2.3% or higher, the ratio stabilizes. At 3% or more, it falls, meaning that we could potentially grow ourselves out of debt; an argument President Donald Trump has also used.

    A tech-driven “supply shock”could also push inflation lower over time as production costs drop while productivity booms, meaning higher real rates may not translate into higher nominal yields.Even external liabilities look manageable, he argues, because rising tech investment tends to attract foreign equity inflows, similar to how “emerging-market” economies finance growth during a resource boom.

    Roubini also dismisses the widely discussed decline of the dollar, since he believes that the U.S. will accelerate while Europe stagnates, and thus the dollar will ultimately strengthen. 

    Notably, “Dr. Doom” admitted that the U.S.’s top adversary, China, is at least on par with the U.S. in innovating in the “most important industries of the future,” such as AI and robotics. However, he doesn’t seem too concerned with the AI arms race. 

    “The US economy and markets are best positioned among advanced economies,” Roubini wrote. “They will continue to benefit from the US being the most innovative advanced country.”

    Eva Roytburg, Nick Lichtenberg

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  • Are we in an AI bubble? How to protect your portfolio if your AI investments turn against you.

    Despite stellar earnings reports from Nvidia (NVDA) this week and record returns of tech stocks related to artificial intelligence so far this year, there is still a lot of hand-wringing about a possible AI bubble.

    The 70 stocks that comprise the Global X Artificial Intelligence & Technology ETF (AIQ) have lost $2.4 trillion in value since Oct. 29, according to an Investor’s Business Daily analysis.

    The November 2025 Bank of America Global Fund Manager Survey reported 45% of respondents believe an AI equity bubble is the most significant current market risk. More than half of the money managers believed AI stocks are already in bubble territory.

    Are we approaching an AI bubble? And if that’s uncertain, how do you protect your portfolio if your AI investments turn against you?

    Read more: Thinking of buying Nvidia stock? Consider buying others just like it.

    Past failures often haunt stock market investors. The dot-com bust of the late 1990s and early 2000s is a recurring nightmare for some. Are we approaching a similar stock market cliff? Two noted analysts disagree.

    Carolyn Barnette, head of market and portfolio insights at BlackRock, doesn’t see the symptoms of a dot-com crash. Today’s AI investments are “a fundamentally different landscape — one supported by real profitability, disciplined capital allocation, and broad-based adoption,” she wrote in a report to advisors last week.

    “Unlike the speculative frenzy of the late 1990s and early 2000s, today’s technology leaders are anchored by fundamental stability. Strong profitability, steady cash generation, and healthy balance sheets provide a foundation for continued investment and growth,” Barnette wrote in the analysis.

    Barnette notes that, unlike the dot-coms, AI capital investments are being funded by earnings and cash rather than debt.

    “This self-financing makes the sector more resilient to higher interest rates and less vulnerable to liquidity shocks. Many companies are investing from a position of strength, not speculation,” Barnette wrote.

    Yet, many experts with their own charts disagree, saying we are in an AI investment bubble.

    One is Apollo Global Management chief economist Torsten Sløk.

    “The difference between the IT bubble in the 1990s and the AI bubble today is that the top 10 companies in the S&P 500 today are more overvalued than they were in the 1990s,” Sløk wrote in a July analysis.

    Sløk believes the overheated AI sector was born out of the zero-interest-rate environment before March 2022. When the Federal Reserve began raising interest rates, tech companies stopped hiring, borrowing costs rose, and investor risk appetites diminished.

    “The bottom line is that the bubble in AI valuations was simply the result of a long period with zero interest rates,” Sløk wrote in May. “With upward pressures on inflation coming from tariffs, deglobalization, and demographics, interest rates will remain high and continue to be a headwind to tech and growth for the coming years.” (Disclosure: Yahoo Finance is owned by Apollo Global Management.)

    AI bubble

    Read more: Create a stock investing strategy in 3 steps

    If the experts disagree, perhaps it’s best to prepare for both AI scenarios: boom and bubble.

    Kevin Gordon, Schwab’s senior investment strategist, said investors should first determine what kind of AI investments they hold.

    “I think one of the ways to hedge and diversify around [the risk] is actually thinking about the difference and the important distinction between the AI creators and the AI adopters,” Gordon said in a Schwab video released in September. “So much of the focus over the past couple of years has been on the creators. We’ve spent a lot of time thinking about who are the ‘adopters’ and who could benefit from the technology.”

    He believes adopters are going to become a critical next leg of the investment cycle for industries that don’t have the ability to be an AI creator. Consider diversifying your portfolio with those who benefit from the technology rather than those who create it.

    Gordon also believes investors should periodically revisit their investment time horizon and risk tolerance. When will you begin tapping your investments for cash, and are your investments built for that inevitability?

    “I think this is one of those moments where you need to look at your portfolio to see where those align,” Gordon said.

    The UBS chief investment office recommends international exposure, high-grade bonds, and gold to protect a portfolio.

    “We think the equity bull market has further room to run, and have reiterated that an easing Federal Reserve, durable earnings growth, and AI investment spending support our attractive view on US equities. But we also believe investors should diversify their portfolios beyond US equities,” UBS said in a note to clients.

    UBS highlighted three “appealing opportunities”:

    • China’s tech sector and Japanese equities: “We particularly like China’s tech sector as we believe Beijing’s push for tech self-sufficiency and innovation creates a foundation for the rally to continue.”

    • Quality bonds: “We would expect quality bonds to rally in the event of fears about the health of the US economy or the durability of the AI rally. With yields still at relatively elevated levels, the risk-return profile for quality bonds is appealing.”

    • Gold: “Gold remains an effective portfolio diversifier and hedge against political and economic risks, and we view this week’s sell-off as a healthy consolidation. While volatility is likely to persist in the near term, lower real interest rates, a weaker US dollar, and concerns over government debt or geopolitical uncertainty should continue to boost demand for bullion.”

    Read more: How to invest in gold in 4 steps

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  • Nvidia by the numbers: $5 trillion market cap and soaring stock – MoneySense

    Nvidia carved out an early lead in tailoring its chipsets known as graphics processing units, or GPUs, from use in powering video games to helping to train powerful AI systems, like the technology behind ChatGPT and image generators. Demand skyrocketed as more people began using AI chatbots. Tech companies scrambled for more chips to build and run them.

    Nvidia’s journey to be one of the world’s most prominent companies has produced some extraordinary numbers. Here’s a look.

    $31.9 billion
    Nvidia’s net income for the third quarter, up from $19.3 billion a year ago.

    38.9%
    Nvidia stock’s gain for the year, as of the close of trading Wednesday. That follows gains of 171% in 2024 and 239% in 2023.

    $4.53 trillion
    Nvidia’s total market capitalization as of the close of trading Wednesday, tops in the S&P 500. Apple at $3.98 trillion and Microsoft at $3.62 trillion were next among the most valuable companies in the S&P 500. In all, nine companies in the index have market cap’s above $1 trillion.

    $4.28 trillion
    The gross domestic product of Japan, the world’s fourth largest economy, according to the International Monetary Fund.

    79
    The number of trading days it took for Nvidia’s market cap to grow from $4 trillion to $5 trillion earlier this year. The market cap had jumped from $3 trillion on May 13, to $4 trillion on July 9 (41 trading days), although Nvidia had crossed and fallen back below the $3 trillion threshold a number of times between June 2024 and May 2025 before making the run to $4 trillion.

    19.8%
    The company’s contribution to the gain in the S&:P 500 this year as of Oct. 31, according to S&P Dow Jones Indices.

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    $162 billion
    The net worth of Nvidia CEO Jensen Huang, according to Forbes, putting him eighth on its Real-Time Billionaires List. Elon Musk is No. 1 at $467.7 billion.

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  • Is the AI boom a ‘bubble’? Tech leaders don’t think so – MoneySense

    “There was a lag,” said Deierling, speaking in Toronto on Wednesday alongside other tech sector executives on the sidelines of the Cisco Connect conference. “All of a sudden I have all this bandwidth for the internet and the dot-com era, but now I actually need Amazon and Uber and Netflix and all of these other businesses.”

    AI tech is ready, no wait required

    While those use cases did develop over time, Deierling said AI doesn’t have to wait decades. He said applications for software built on AI technology “already exist” and companies can take advantage of them right away.

    “In the dot-com era, by the late 1990s, early 2000s, you started to see inventory build up … and people were shipping things that actually weren’t selling through. We don’t see that at all,” he said in an interview. “This stuff gets used as soon as it gets built.”

    The hopeful outlook came just hours before the company reported its latest quarterly earnings Wednesday, potentially easing some analysts’ recent jitters. The company posted net income of US$31.9 billion for the third quarter, up from US$19.3 billion a year ago, while revenue rose 62%. Nvidia’s sales of the computing chipsets known as graphics processing units—which are used to help train powerful AI systems like the technology behind ChatGPT and image generators—surged beyond analysts’ expectations.

    Nvidia, Wall Street’s largest stock which briefly topped US$5 trillion in value, has struggled this month, losing more than 10% on the S&P 500 as of Tuesday. As of late-morning Thursday, the stock was trading roughly 6% higher. Analysts have been closely watching the stock for potential indications of how the AI sector might continue to perform because other companies rely on Nvidia’s chips to ramp up their own AI efforts.

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    AI demand strong despite profit concerns

    While stocks linked to AI have been surging for years, there have been mounting concerns that the outsized level of spending in the industry may not lead to as much profit as hoped. Other leaders in the sector also downplayed those worries at Wednesday’s conference. Francois Chadwick, chief financial officer for Toronto tech firm Cohere, likened demand for AI to a “constant drumbeat.”

    “There is a real need,” said Chadwick in an interview, adding that in the early days of the internet, some tech companies were “building things that no one really even needed or wanted. Right now, there’s the demand, there is the need. Companies, enterprises, governments—everyone’s asking for this.”

    That doesn’t mean all investment in AI is going to bear fruit, cautioned Tom Gillis, senior vice-president and general manager of infrastructure and security at Cisco. He said that with disruption of this scale, there “has to be winners and losers. Someone is going to be making a bet and doing something that turns out to be wrong,” said Gillis.

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    “But do I think there’s going to be some sort of retraction and like, ‘Oh, it turns out AI isn’t that useful?’ Just hop on to your chat interface and then you tell me … It’s really, really, really valuable and so I think it justifies a significant amount of capital to drive that change.”

    Canada strong in research, slow in deployment

    A study released last month found just 8% of Canadian organizations qualify as “AI-ready.” The CiscoAI Readiness Index said nearly three-quarters of those surveyed in Canada plan to deploy AI agents and 34% expect them to work alongside employees within a year, but few have the secure infrastructure to sustain it. Those that are fully prepared are 50% more likely to see measurable value.

    Deierling described Canada as “ahead on research and behind on deployment” when it comes to AI usage. “And I don’t understand why,” he said. “I mean, you have the core capacity, the people that understand this. You have all kinds of businesses that should benefit from this, and so I think it’s just a matter of will.”

    But Deierling acknowledged that many companies remain fearful of AI. He said the key is to start out small, often focusing on internal use cases, rather than “risk your entire business on some AI that you may not understand how to implement.”

    “Every company is ready to use AI, they just don’t know it,” he said. “The risk isn’t that high. Deploy something and start using it and what you’ll find is that there’s so much productivity gains that the demand will just completely drive the next generation.”

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  • Apple is ramping up succession plans for CEO Tim Cook and may tap this hardware exec to take over, report says | Fortune

    Apple’s board of directors and senior executives have been accelerating succession plans for Tim Cook, sources told the Financial Times.

    After serving as CEO for 14 years, Cook may step down as early as next year, the report said.

    Apple’s senior vice president of hardware engineering, 50-year-old John Ternus, is widely seen as the most likely successor, but no final decisions have been made yet, sources told the FT.

    The engineer joined Apple’s product design team in 2001 and has overseen hardware engineering for most major products the tech company has launched ever since, according to Ternus’ LinkedIn profile.

    He has also played a prominent role during Apple’s most recent keynotes, introducing products like the new iPhone Air. Ternus had been rumored to be Cook’s potential successor, according to previous reports. 

    The company is unlikely to name a new CEO before its next earnings report in late January, and an early-year announcement would allow a new leadership team time to settle in before its annual events, the FT said. 

    The succession preparations have been long-planned and are not related to the company’s current performance, which is expecting strong end-of-year sales, people close to Apple told the FT.

    Apple did not immediately respond to Fortune’s request for comment and declined to provide a comment to the FT.

    The $4 trillion company is expecting year-on-year revenue growth of 10% to 12% for its holiday quarter ending in December, fueled by the release of the iPhone 17 model in September.

    Ternus would take the helm of the tech giant at an important time in its evolution. Although Apple has seen sales success with iPhones and new products like Airpods over the past couple of decades, it has struggled to break into AI and keep up with rivals.

    Instead, Apple has even spending significantly less in AI investments compared to Mark Zuckerberg’s Meta, Amazon, Alphabet, and Microsoft. 

    Apple has been criticized by analysts this year for not having a clear AI strategy. And despite approving a multibillion-dollar budget to run its own models via the cloud in 2026, it was reported in June that Apple is even considering using models from OpenAI and Anthropic to power its updated version of Siri, rather than using technology the company has built in-house. 

    Its AI-enabled Siri, originally slated for 2025, will be delayed until 2026 or later due to a series of technical challenges, the company announced earlier this year.

    Apple has also lost a number of senior AI team members since January, many of whom have joined Meta’s AI and Superintelligence Labs during talent poaching wars this year. The exodus of Apple’s AI execs included Ruoming Pang, former head of Apple’s foundation models and core generative AI team, who joined Meta with a compensation package reportedly worth $200 million.

    The company is also dealing with increased competition from one of its most influential former employees.

    In May, Sam Altman’s OpenAI acquired startup io for about $6.5 billion, bringing in former Apple chief designer Jony Ive to build AI devices. The 58-year-old designer was instrumental in creating the iPhone, iPod, and iPad. 

    Cook, Apple’s former operations chief, turned 65 this month. He has grown the company’s market capitalization to $4 trillion from $350 billion in 2011, when he took over the CEO role from company co-founder Steve Jobs.

    Under Cook, Apple became the first publicly traded company to reach $1 trillion in market capitalization in 2018—then it became the first company to reach $3 trillion in market cap in 2022.

    But more recently, its stock price has been lagging behind Big Tech rivals Alphabet, Nvidia, and Microsoft, though Apple is trading close to an all-time high after strong earnings were reported in October.

    Apple has also dealt with tariff complications as U.S.-China trade tensions have disrupted its supply chain.

    Cook has previously said he’d prefer an internal candidate to replace him, adding that the company has “very detailed succession plans.”

    “I really want the person to come from within Apple,” Cook told singer Dua Lipa last year on her podcast At Your Service.

    Nino Paoli

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  • Palantir CEO slams ‘parasitic’ critics calling the tech a surveillance tool: ‘Not only is patriotism right, patriotism will make you rich’ | Fortune

    Palantir CEO Alex Karp is sick and tired of his critics. That much is clear. But during the Yahoo Finance Invest Conference Thursday, he escalated his counteroffensive, aimed squarely at analysts, journalists, and political commentators who have long attacked the company as a symbol of an encroaching surveillance state, or as overvalued. 

    Karp’s message: They were wrong then, they’re wrong now, and they’ve cost everyday Americans real money.

    “How often have you been right in the past?” Karp said when asked why some analysts still insist Palantir’s valuation is too high. 

    He said he thinks negative commentary from traditional finance people—and “their minions,” the analysts—has repeatedly failed to grasp how the company operates, and failed to grasp what Palantir’s retail base saw years earlier. 

    “Do you know how much money you’ve robbed from people with your views on Palantir?” he asked those analysts, arguing those who rated the stock a sell at $6, $12, or $20 pushed regular Americans out of one of tech’s biggest winners, while institutions sat on the sidelines. 

    “By my reckoning, Palantir is one of the only companies where the average American bought—and the average sophisticated American sold,” Karp continued, tone incredulous. 

    That sort-of populist inversion sits at the core of Karp’s broader argument: The people who call Palantir a surveillance tool—his word for them is “parasitic”—understand neither the product nor the country that enabled it.

    “Should an enterprise be parasitic? Should the host be paying to make your company larger while getting no actual value?” he questioned, drawing a line between Palantir’s pitch and what he said he sees as the “woke-mind-virus” versions of enterprise software that generate fees without changing outcomes.

    Instead, Karp insists Palantir’s software is built for the welder, the truck driver, the factory technician, and the soldier—not the surveillance bureaucrat.

    He describes the company’s work as enabling “AI that actually works”: systems that improve routing for truck drivers, upgrade the capabilities of welders, help factory workers manage complex tasks, and give warfighters technology so advanced “our adversaries don’t want to fight with us.”

    That, he argues, is the opposite of a surveillance dragnet. It’s a national-security asset, part of the deeper American story. That’s what Palantir’s retail-heavy investor base understands: the country’s constitutional and technological system is uniquely powerful, and defending it isn’t just morally correct, it’s financially rewarded.

    “Not only was the patriotism right, the patriotism will make you rich,” he said, arguing Silicon Valley only listens to ideas when they make money. Palantir’s success, in his view, is proof the combination of American military strength and technological dominance—“chips to ontology, above and below”—remains unmatched worldwide.

    That, he believes, is what critics get wrong. While detractors warn Palantir fuels the surveillance state, Karp argues the company exists to prevent abuses of power—by making the U.S. so technologically dominant it rarely needs to project force.

    “Our project is to make America so strong we never fight,” he said. “That’s very different than being almost strong enough, so you always fight.”

    Karp savors the reversal: ‘broken-down car’ vs. ‘beautiful Tesla’

    Karp bitterly contrasted the fortunes of analysts who doubted the company with the retail investors who stuck with it.

    “Nothing makes me happier,” he said, than imagining “the bank executive…cruising along in their broken-down car,” watching a truck driver or welder—“someone who didn’t go to an elite school”—drive a “beautiful Tesla” paid for with Palantir gains.

    This wasn’t even a metaphor. Karp said he regularly meets everyday workers who “are now rich because of Palantir”—and the people who bet against the company have themselves become a kind-of meme.

    Critics—especially civil-liberties groups—have accused Palantir for years of building analytics tools that enable government surveillance. Karp says these attacks rely on caricature, not fact.

    “Pure ideas don’t change the world,” he said. “Pure ideas backed by military strength and economic strength do.”

    Eva Roytburg

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  • 6 overlooked AI stocks to consider buying now

    Brendan McDermid/Reuters

    • Some top investors are eyeing AI opportunities outside of the Magnificent 7.

    • Nvidia and other major AI firms face high expectations and a potential growth slowdown.

    • Experts suggest investing in data storage and hardware providers for AI opportunities.

    The first wave of AI stocks — including chipmakers like Nvidia and Broadcom, as well as hyperscalers like Microsoft, Meta, and Amazon — may all still be great buys.

    But there’s no mistaking the high expectations that investors are placing on these household names going forward. Plus, the uber-explosive earnings growth for names like Nvidia may soon start to slow, as the company told investors in its recent earnings call.

    So if you missed their run-ups in the market, you might be feeling like you missed the boat on the AI trade. (To be fair, you probably didn’t miss out entirely — these companies have huge exposures in the S&P 500 and Nasdaq 100, meaning most index investors already have some fairly sizeable positions in the AI giants.)

    But if you’re looking for some overlooked AI firms, there are still plenty of opportunities out there, according to Que Nguyen, the CIO at Research Affiliates, and Brian Mulberry, a senior portfolio manager at Zacks Investment Management.

    In recent interviews with Business Insider, the duo shared some of their preferred non-mega-cap AI stocks right now.

    For Nguyen’s part, she said to look to stocks like Western Digital (WDC), Seagate Technologies (STX), Hewlett Packard Enterprise (HPE), and Micron Technology (MU) — all data storage providers.

    “One of the things that I see is AI is spreading and benefiting an entire ecosystem of technology companies,” Nguyen said. “So you look at even boring companies like hard disk companies — in order to have AI you need to be able to store a lot of data and get it quickly, right?”

    “None of these companies is nearly as expensive as the Mag 7,” she continued. “Don’t just stick with the Mag 7, or Nvidia and AMD. Look more broadly — own something diversified. You have no idea where the next killer app is going to come, or where the next big investment theme is going to be.”

    Some examples of diversified products offering specific AI and tech stocks expsoure include the Global X Artificial Intelligence & Technology ETF (AIQ) and the iShares AI Adopters & Applications UCITS ETF (AIAA).

    Meanwhile, Mulberry said he likes stocks like Amphenol (APH) and Emcor (EME).

    Both are hardware providers, and are raking in money from hyperscalers as they spend hundreds of billions to build out their AI data centers, Mulberry said. Consensus earnings estimates for both firms show growth in the next couple of years, he said.

    “They’re simply benefiting from the actual dollars being spent without having to increase their own capex,” he said of the stocks.

    He continued: “They’re very specialized electrical connectors, and they don’t have to do anything other than just show up and start helping build out data centers with their expertise.”

    Read the original article on Business Insider

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  • Investors are looking at bargains in China, says HSBC investment boss, pushed by AI discounts and fears over Trump 2.0

    When President Trump returned to the White House his intention was clear: Make America Great Again. But the United States’s economic partners, and some of its rivals, are also benefitting from having the unorthodox showman back in the Oval Office.

    Investors are watching the U.S. stock market with both enthusiasm and trepidation: The S&P 500 is up 15% over the past year, Treasuries have remained relatively steady, and the Fed’s monetary policy is expected to begin a downwards trajectory.

    But overlaying the strong fundamentals are questions: Is the soaring growth of the Magnificent 7 stocks overvalued on the unfulfilled promises of AI? Will Trump’s unusual foreign policy materially damage the domestic economy? And where might the true winners of the artificial intelligence race emerge from?

    Increasingly, investors are answering those questions by diversifting into a key region says Willem Sels, the global chief investment officer for HSBC’s global private bank. That region is China.

    America continues to prove to its economic resilience and earnings deliverables, Sels told Fortune in an exclusive interview, but geopolitical uncertainty is pushing investors towards balancing risk with other regions.

    Traditionally, the question of political influence over portfolios has centered on emerging markets, said Sels, but over the past few years that has moved into developed markets as well. As such, diversification has become more of a focus—particularly for business owners looking to spread risk between the economy they operate in and the assets used to protect their wealth.

    “When a client comes in the door … the first discussion is please build a global portfolio. Maybe try to have as little as possible in your home country if you already have your business here, because that’s diversification,” Sels said. “Clearly the debate over the last few months was about, will there be diversification away from the U.S.? And there are a number of elements to that.”

    Part of the question is how dominant U.S. Big Tech has become in equity markets, with the Magnificent 7 stocks (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia and Tesla) providing most of the growth. As such, if these stocks hiccup it can have major ramifications for portfolios.

    “Clearly you potentially need to do something around that … to diversify,” Sels said, “We highlight things like make sure that you don’t only have the growth stocks but have some value stocks, do some sector diversification, do some geographical diversification and so on. 

    “The other thing that triggered that diversification discussion obviously was the rapid policy changes in the U.S., and the growth of the debt pile, which led people to ask the question, is there a de-dollarization story and what does that mean in terms of my portfolio and other people’s portfolio? What we’ve seen in the data is that there have been two months or so where there were some outflows out of bonds and equity markets, but that has not lasted—to a large extent because policy has become a little bit clearer.”

    Safe haven out of Europe and into China

    “People are adding a little bit to other regions, adding a little bit to other sectors to be less concentrated in the U.S. market, but they are not fleeing away from it,” Sels continued. “There was enthusiasm for European stocks, but it was very short-lived. The Asian investors over the last 15 [to] 20 years that I’ve been going there find it very hard to get excited about Europe.”

    Part of the problem is that these investors don’t see as many new or emerging companies which could materially change the European economy, and there’s also the issue of brand recognition beyond companies like LVMH and BMW, Sels said.

    “This is the first time that we’re again seeing flows from Europe into China,” Sels added. “That is to a large extent because of the AI trade that people want to play, and then secondly this concept of anti-involution … with the supply side reforms which would address the issue of overcapacity, therefore the deflation issue and therefore the earnings growth, because what you have in China is a lot of very competitive companies … therefore they have no pressing power and therefore earnings growth has been reasonably weak.”

    China has signaled a shift in priorities to address involution, with the country’s Central Finance and Economic Affairs Commission telling President Xi Jinping in a meeting last month that Beijing must “focus on key and difficult issues, regulate enterprises’ disorderly and low-price competition” and “guide enterprises to improve product quality and promote the orderly exit of outdated production capacity.”

    Beijing is no stranger to the issue. In 2015 the government launched similar action to address overcapacity, particularly in key regions like steel and coal, in order to boost corporate profitability.

    Flash forward to 2025 and “they’re now addressing that,” Sels said, “Therefore we think that earnings expectations will go up … one of the main obstacles for our clients had been the belief that [Chinese companies are] over-competing and therefore your earnings are not there, the economic growth is potentially there, but your earnings are not there.” 

    “That’s now changing, so we’re seeing flows back and obviously also encouraged by ‘How can I diversify my big U.S. trunk of assets?’”

    AI discount

    With discussions about diversification out of U.S. remaining active, China seems to have emerged as the region to balance that risk, Sels said. And Beijing’s typically lower share prices also offer the category of the moment, AI, at a bargain.

    In a note published last week, HSBC noted that within the AI ecosystem, infrastructure stocks are outperforming enablers and adopters—at 22.2% versus 11.3% and 13.5% since July. Indeed, this week Chinese chipmaker Cambricon Technologies briefly became the country’s most expensive stock, surging 10% on Wednesday to 1,465 yuan ($204.62). At the time of writing, the share price has dropped back but is up 112% for the year to date.

    And while Cambricon exemplifies the more expensive end of the scale, Sels highlights that other equivalents to U.S. stocks can be found at a “30 to 40% discount.”

    “We’re basically saying, listen, don’t just look at the chips makers but also look at the guys that build out the infrastructure around it. The guys that build out the energy, the electricity supply around it, the robotics and automation where it is not just a matter of we move the data a little bit—this is real, big innovation. And so by diversifying throughout the AI ecosystem, I think you address a little bit the question about valuations.”

    China’s stock market is soaring: The SSE Composite Index is up 33.4% over the past year while the S&P 500 is up 14.9%. While the growth in China is marked, HSBC’s research points out U.S. AI-related capex (driven by the “Big 4” of Amazon, Alphabet, Microsoft, and Meta along with
    Stargate and other private companies) are outspending China’s “Big 4” (Alibaba, ByteDance, Tencent, and Baidu, as well as telecom services companies) by eight to 10 times.

    Moreover, HSBC’s research adds: “U.S. firms achieve higher returns on AI capex, with cloud platforms generating significantly more revenue than their Chinese counterparts – close to USD $400bn in the U.S. vs. USD $60bn in China in 2024, according to Statista.”

    So while clients may be balancing against over-reliance on American companies, Sels said, the upside fundamentals of the U.S. remain strong—enough so to take a recession off the table. Indeed, while blips in tech stocks recently led to questions over an AI bubble, the HSBC boss remained bullish: “We certainly think that that AI liftoff is structural in nature.”

    Eleanor Pringle

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  • The Nasdaq Just Reached a Terrifying Valuation Level, and History Is Very Clear About What Happens Next

    • Several market indicators mirror that of the dot-com bubble of late 1999.

    • When that tech bubble popped, the Nasdaq plunged 78% over three years.

    • Here’s what’s similar about today’s AI-crazed market, what may be different, and what investors should do now.

    • 10 stocks we like better than NASDAQ Composite Index ›

    Investors have ridden an incredible recovery from the April 2 “Liberation Day” tariff surprises. Since the April 8 low, the Nasdaq Composite (NASDAQINDEX: ^IXIC) has appreciated an incredible 40%. And of course, that recovery has taken place amid a decade-long bull market in technology growth stocks.

    It’s easy to understand why. Society is becoming more digital and automated. The last 10 years have seen the emergence of cloud computing, streaming video, digital advertising, the pandemic-era boom in electronic devices and work-from-home, all topped off by the introduction of generative artificial intelligence (AI) marked by the unveiling of ChatGPT in late 2022.

    However, after a long tech bull market, technology growth stocks have reached a worrying valuation level relative to other stocks, and today’s relative overvaluation mirrors an infamous period in stock market history.

    In several ways, technology stock performance and valuations are currently mirroring the extremes of the dot-com boom of the late 1990s. Unfortunately, we all know how that period ended, with a terrible “bust” that sent the Nasdaq tumbling three years in a row, eventually culminating in a 78% drawdown from the March 10, 2000, peak.

    QQQ data by YCharts.

    Technology innovation can be very exciting; however, that excitement often finds itself in the form of high valuations. According to data published on Charlie Bilello’s State of the Markets blog, the technology sector’s recent outperformance has now exceeded that of the height of the dot-com bubble:

    Graph showing tech sector performance relative to S&P 500 since 1990.
    Graph showing tech sector performance relative to S&P 500 since 1990.

    Image source: Charlie Bilello’s State of the Markets blog.

    The relative outperformance isn’t the only mirror to the dot-com era. Back then, tech stocks also became very large, leading to an outperformance of large stocks relative to small stocks. Similarly, tech stocks are often growth stocks with high multiples, reflecting enthusiasm over their future prospects. This is in contrast to value stocks, which trade at low multiples, usually due to their more modest growth prospects.

    As you can see below, the outperformance of large stocks to small stocks, as well as growth stocks to value stocks, is at highs last seen during the dot-com boom.

    Graph of relative performance of growth stocks versus value stocks since 1990.
    Image source: Charlie Bilello’s State of the Markets blog.
    Graph showing relative performance of large cap stocks to small cap stocks since 1990.
    Image source: Charlie Bilello’s State of the Markets blog.

    Given that higher-valued tech stocks now make up a larger portion of the index, the Schiller price-to-earnings (P/E) ratio, which adjusts for cyclicality in earnings over 10 years, while not quite at the levels of 1999, has crept up to the highest level since 1999, roughly matching the level from 2021:

    S&P 500 Shiller CAPE Ratio Chart
    S&P 500 Shiller CAPE Ratio data by YCharts. CAPE Ratio = cyclically adjusted P/E ratio.

    As we all know, 2022 was also a terrible year for tech stocks. While it didn’t see a multiyear crash akin to the dot-com bust, 2022 saw the Nasdaq decline 33.1% on the year. Of course, at the end of 2022, ChatGPT came out, somewhat saving the tech sector as the AI revolution kicked off.

    Thus, when compared to history, tech stocks are at worrying levels. Given the similarities to the 1999 dot-com bubble and the 2021 pandemic bubble, some may think it’s time to panic and sell; however, there are also a few counter-narratives to consider.

    The first is that, unlike in 1999, today’s technology giants are mostly truly diversified, cash-rich behemoths that account for a greater and greater percentage of today’s gross domestic product (GDP). While the late 1990s certainly had its leaders — including Microsoft (NASDAQ: MSFT), the only market leader that is in the same position today as then — they weren’t really anything like today’s tech giants, with robust cloud businesses, global scale, diversified income streams, and tremendous amounts of cash.

    While market concentration in the top three weightings tends to occur before market downturns, index weighting concentration appears to be somewhat of a long-term trend now, increasing beyond prior highs in 1999 and 2008 since 2019.

    Bar graph showing concentration of top three names in market.
    Image source: Charlie Bilello State of the Markets blog.

    Thus, it seems a higher weighting of the “Magnificent Seven” stocks could be a feature of today’s economy, rather than an aberration.

    While it’s true that some of today’s large companies are overvalued, given their underlying strength and resilience, it’s perhaps not abnormal for them to garner higher-than-normal valuation multiples.

    It’s important to know that while taking note of market levels is important, it is extremely difficult to time market downturns. Famed investor Peter Lynch once said, “Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.”

    So, one shouldn’t abandon one’s long-term investing plan just because overall market levels may be frothy. That being said, if you need a certain amount of cash in the next one to two years, it may be a good idea to keep that money in cash or Treasury bills until then, rather than the stock market.

    Furthermore, if you have a regular, methodical investing plan, stick to it. But if you are consistently adding to your portfolio every month or quarter, you may want to look at small caps, non-tech sectors, and value stocks today, rather than adding to large technology companies.

    Before you buy stock in NASDAQ Composite Index, consider this:

    The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and NASDAQ Composite Index wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

    Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $649,657!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,090,993!*

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    The Nasdaq Just Reached a Terrifying Valuation Level, and History Is Very Clear About What Happens Next was originally published by The Motley Fool

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  • ‘How big could this bubble get?’: Why a famed strategist says the government bond market could spoil a fragile bull rally

    FILE – In this Jan. 2, 2020, file photo traders monitor stock prices at the New York Stock Exchange. The U.S. stock market opens at 9:30 a.m. EST on Thursday, Jan. 9. (AP Photo/Mark Lennihan, File)Associated Press

    • Albert Edwards warns of a tech stock bubble amid high valuations.

    • The tech sector is now 37% of the US stock market, surpassing the dot-com era peak.

    • But rising bond yields will eventually stop the rally, Edwards said.

    Like the high market valuation levels he warns about, Société Générale strategist Albert Edwards‘ bearish missives don’t tend to serve well as near-term market timing tools.

    He acknowledges as much.

    “An equity investor who heeded my words of caution on the US Tech ‘bubble’ will by now have taken to sticking pins in plasticine models of me,” Edwards wrote in an August 21 note to clients. “Indeed, my ankle has been hurting for over six months and although the physio says it is tendonitis, I strongly suspect otherwise.”

    But there’s no denying that Edwards, a stark contrarian amid the pervasively bullish attitude on Wall Street these days, has some concerning observations about where the market sits — particularly with respect to tech stocks, and in the context of government bond yields.

    Building on his argument that the market is in a bubble, he highlighted in his latest note that the tech sector now makes up 37% of the total US market, which is higher than at the peak of the dot-com bubble in 2000. Over the last few years, investors have piled into tech amid the frenzied excitement about AI.

    tech sector
    SOCIETE GENERALE

    Another metric showing that the tech sector has historically high valuations is a falling free cash flow yield. This means that current market prices are high relative to cash flow after expenses as tech firms dump money into AI development. The sector has a free cash flow yield of around two. This is also reflected in the S&P 500’s low dividend yield of 1.2%.

    Meanwhile, long-term government bond yields have surged at the same time as the tech rally, and offer virtually risk-free yields of over 4%.

    The ratio of 10-year Treasury yields to the market’s dividend yield has climbed to dot-com era levels.

    10y bond yield vs stock market dividend yield
    SOCIETE GENERALE

    Historically, rising bond yields have weighed on stock valuations, but that hasn’t seemed to be the case so far in this market. Edwards says it’s only a matter of time until that changes.

    “Only the other day, interest rates were rock bottom and equity bulls were telling us that sky high equity valuations were justified by TINA — There Is No Alternative,” he wrote. “But that TINA magic no longer works, now that interest rates are so much higher. So, how come the equity market is able to shrug off the relentless rise in long bond yields by feeding off news of strong profits from a handful of mega-cap tech stocks and the promise of more to come?”

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  • Tariffs will take a $100 million bite out of Estee Lauder’s bottom line, company says

    The S&P 500 dropped 1% and was on track for its worst day since the first of the month. It’s also heading for a fourth straight loss after setting an all-time high last week. The Dow Jones Industrial Average was down 115 points, or 0.3%, as of 10:50 a.m. Eastern time, and the Nasdaq composite was 1.8% lower.

    Nvidia, whose chips are powering much of the world’s move into AI, dropped 3.7% and was on track to be the heaviest weight on Wall Street for a second straight day following its 3.5% fall on Tuesday.

    Palantir Technologies, another AI darling, sank 9.3% to add to its 9.4% loss from the day before.

    One possible contributor to the swoon was a study from MIT’s Nanda Initiative that warned most corporations are not yet seeing any measurable return from their generative AI investments, according to Ulrike Hoffmann-Burchardi, global head of equities at UBS Global Wealth Management.

    But such companies have also been facing criticism for a while that their stock prices simply shot too high, too fast amid the furor around AI and became too expensive. Nvidia, whose profit report scheduled for next week is one of Wall Street’s next major events, had soared 35.5% for the year so far before Tuesday. Palantir had surged even more, more than doubling.

    The tech stocks still have supporters, though, who say AI will bring the next generational revolution in business.

    Mixed profit reports from big U.S. retailers helped keep the rest of the market in check.

    TJX, the company behind the TJ Maxx and Marshalls stores, climbed 4.4% after beating analysts’ forecasts for profit and revenue. It also raised its forecast for profit over its full fiscal year, while CEO Ernie Herrman said TJX is seeing “strong demand at each of our U.S. and international businesses” and that its current quarter is off to a strong start.

    Lowe’s added 0.9% after the home-improvement retailer delivered a profit for the latest quarter that topped analysts’ expectations. It also said it agreed to buy Foundation Building Materials, a distributor of drywall, ceiling systems and other interior building products, for about $8.8 billion.

    Target, meanwhile, tumbled 7.3% even though it edged past analysts’ expectations for profit in the spring. The struggling retailer said that CEO Brian Cornell plans to step down Feb. 1 and that an insider, 20-year veteran Michael Fiddelke, will replace him. He helped reenergize the company, but it has struggled to turn around weak sales in a more competitive post-COVID retail landscape.

    Estee Lauder dropped 5.8% after offering a forecast for profit this upcoming fiscal year that fell short of Wall Street’s estimates. The beauty company said it expects tariffs to shave roughly $100 million off its upcoming earnings.

    La-Z-Boy sank 13.4% after the furniture maker’s profit and revenue for the spring came up shy of analysts’ expectations. CEO Melinda Whittington said it’s contending with “soft industry demand” and that it’s looking at potential alternatives “to address financial pressure from non-core’ parts” of its business.

    The week’s biggest news for Wall Street is likely arriving on Friday, when Federal Reserve Chair Jerome Powell will give a highly anticipated speech in Jackson Hole, Wyoming. The setting has been home to big policy announcements from the Fed in the past, and the hope on Wall Street is that Powell will hint that an interest rate cut is coming soon.

    The Fed has kept its main interest rate steady this year, primarily because of the fear of the possibility that President Donald Trump’s tariffs could push inflation higher. But a surprisingly weak report on job growth across the country may be superseding that.

    Treasury yields have come down sharply on expectations for coming cuts to interest rates, and the yield on the 10-year Treasury edged down to 4.28% from 4.30% late Tuesday.

    In stock markets abroad, indexes were mixed across Europe and Asia.

    London’s FTSE 100 rose 1.1% despite a report that said inflation in the U.K. rose more than expected through July, in part due to soaring airfares and food prices.

    Tokyo’s Nikkei 225 dropped 1.5% after Japan reported that its exports fell slightly more than expected in July, pressured by higher tariffs on goods shipped to the U.S. Imports also fell from a year ago.

    Hong Kong’s Hang Seng added 0.2%. Shares that trade there of Chinese toy company Pop Mart International Group soared 12.5% after its CEO said its annual revenue could top $4 billion this year and announced the release of a mini version of its popular Labubu dolls.

    Introducing the 2025 Fortune Global 500, the definitive ranking of the biggest companies in the world. Explore this year’s list.

    Stan Choe, The Associated Press

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  • Making sense of the markets this week: November 3, 2024 – MoneySense

    Making sense of the markets this week: November 3, 2024 – MoneySense

    Amazon earnings highlights

    Share prices were up 5% in after-hours trading on Thursday after the strong earnings beat.

    • Amazon (AMZN/NASDAQ): Earnings per share of $1.43 (versus $0.14 predicted) and revenues of $134.4 billion (versus $131.5 billion predicted).

    Amazon Web Services (AWS) remains the golden goose, even though very few of Amazon’s retail customers know it exists. Revenues climbed 19% during the quarter, and totalled $27.4 billion. Amazon’s advertising revenues were another highlighted area of the report, as they were up 19%. Overall operating profits grew 56% year over year to $17.4 billion, mostly credited to the 27,000 jobs cut by the company since 2022.

    Founder, executive chairman and former president and CEO of Amazon, Jeff Bezos was in the headlines this week in his role as owner of the Washington Post. He refused to allow the Post’s editorial team to print their endorsement of Kamala Harris for president, and it was met with widespread outrage from Post readers. As of Tuesday, more than 250,000 subscriptions were cancelled as a result. 

    Source: The Sporting News

    Fortunately for Bezos, he purchased the Washington Post (one of the world’s premier news brands) for “chump change”—$250 million (roughly a mere 1.2% of his net worth). So, if he drives it into the ground, I don’t think he’ll shed tears.

    No doubt co-founder and CEO of Tesla, Elon Musk, is making similar calculations with his luxury purchase two years ago of Twitter (which he rebranded as X). Critics say he has turned the social platform into an echo chamber for Republican presidential candidate Donald Trump. What are the billions for, if a person can’t even enjoy themselves by buying a little media, am I right? (That’s sarcasm.)

    So far we’ve yet to see analysis to show Bezos’ editorial decision affecting Amazon’s share price or revenue numbers. Apparently Republicans buy Amazon Prime, too.

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    Microsoft, Meta and Google: Predictably incredible earnings

    While not having quite as large a market cap as Nvidia and Apple, other mega tech stocks in the U.S. are no slouches. For example, Microsoft is also as valuable as the entirety of Canada’s stock exchanges at $3.2 trillion. Alphabet and Meta clock in at $2.1 trillion and $1.5 trillion respectively. (All figures in this section are in U.S. dollars.)

    Other Big Tech stock news highlights

    Here’s what these companies announced this week.

    • Alphabet (GOOGL/NASDAQ): Earnings per share came in at $2.12 (versus $1.51 predicted) on revenues of $88.27 billion (versus $86.30 billion predicted).
    • Microsoft (MSFT/NASDAQ): Earnings per share of $3.30 (versus $3.10 predicted), and revenues of $65.59 billion (versus $64.51 predicted).
    • Meta (META/NASDAQ): Earnings per share coming in at $6.03 (versus $5.25 predicted) and revenues of $40.59 billion (versus $40.29 predicted).

    All three companies crushed earning estimates across the board. However, shareholders’ reactions to these earnings beats were still muted. Meta shares were down 2.5% in after-hours trading on Wednesday, and it was a similar situation for Microsoft. Alphabet fared better as its shares were up 3%.

    It’s hard to put these numbers into the massive context into which they belong, because the world has never seen anything like these companies before. Here are highlights from the earnings calls. (Scroll the chart left to right with your fingers or press shift, as you use scroll wheel on your mouse to read.)

    Kyle Prevost

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  • Microsoft and Meta profits are soaring but their stocks are sagging because both companies aren’t building data centers fast enough

    Microsoft and Meta profits are soaring but their stocks are sagging because both companies aren’t building data centers fast enough

    NEW YORK (AP) — Wall Street is feeling the downside of high expectations on Thursday, as Microsoft and Meta Platforms drag U.S. stock indexes lower despite delivering strong profits for the summer.

    The S&P 500 was down 1.6% in midday trading and on track for its worst day in nearly eight weeks, falling further from its record set earlier this month. The Dow Jones Industrial Average was down 418 points, or 1%, as of 11:15 a.m. Eastern time. The Nasdaq composite was 2.4% lower and heading for a second straight loss after setting its latest all-time high.

    Microsoft reported bigger profit growth for the latest quarter than analysts expected. Its revenue also topped forecasts, but its stock nevertheless sank 6% as investors and analysts scrutinized for possible disappointments. Many centered on Microsoft’s estimate for upcoming growth in its Azure cloud-computing business, which fell short of some analysts’ expectations.

    The parent company of Facebook, meanwhile, likewise served up a better-than-expected profit report. As with Microsoft, though, that wasn’t enough for the stock to rise. Investors focused on Meta Platforms’ warning that it expects a “significant acceleration” in spending next year as it continues to pour money into developing artificial intelligence. It fell 3.6%.

    Both Microsoft and Meta Platforms have soared in recent years amid a frenzy around AI, and they’re entrenched among Wall Street’s most influential stocks. But such stellar performances have critics saying their stock prices have simply climbed too fast, leaving them too expensive. It’s difficult to meet everyone’s expectations when they’re so high, and Microsoft and Meta were both among Thursday’s heaviest weights on the S&P 500.

    The next two companies in the highly influential group of stocks known as the “Magnificent Seven” to deliver their latest results will be Apple and Amazon. They’re set to report after trading ends for the day, and both fell at least 1.3% on Thursday.

    Earlier this month, Tesla and Alphabet kicked off the Magnificent Seven’s reports with results that investors found impressive enough to reward with higher stock prices. The lone remaining member, Nvidia, will report its results later this earnings season, and its 4.3% drop was Thursday’s heaviest weight on the market after Microsoft.

    The tumble for Big Tech on the last day of October is helping to wipe out the S&P 500’s gain for the month. The index is down 0.7% and on track for its first down month in the last six, even though it set an all-time high during the middle of it.

    Still, it wasn’t a complete washout on Wall Street thanks in part to cruise ships and cigarettes.

    Norwegian Cruise Line Holding steamed 8.2% higher after delivering stronger profit for the latest quarter than analysts expected. The cruise ship operator said it was seeing strong demand from customers across its brands and itineraries, and it raised its profit forecast for the full year of 2024.

    Altria Group rose 7.6% for another one of the S&P 500’s bigger gains after it also beat analysts’ profit expectations. Chief Executive Billy Gifford credited resilience for its Marlboro brand, among other things, and announced a cost-cutting program.

    Oil-and-gas companies also generally rose after the price of a barrel of U.S. crude gained 1.3% to recoup some of its losses for the week and for the year so far. ConocoPhillips jumped 4.9%, and Exxon Mobil gained 1%.

    In the bond market, Treasury yields continued their climb following a mixed set of reports on the U.S. economy.

    One report said a measure of inflation that the Federal Reserve likes to use slowed to 2.1% in September from 2.3%. That’s almost all the way back to the Fed’s 2% target, though underlying trends after ignoring food and energy costs were a touch hotter than economists expected.

    A separate report said growth in workers’ wages and benefits slowed during the summer. That could put less pressure on upcoming inflation. A third report, meanwhile, said fewer U.S. workers applied for unemployment benefits last week. That’s an indication that the number of layoffs remains relatively low across the country.

    Treasury yields swiveled up and down several times following the reports before climbing. The yield on the 10-year Treasury rose to 4.31% from 4.30% late Wednesday. That’s up sharply from the roughly 3.60% level it was at in the middle of last month.

    Yields have been rallying following a string of stronger-than-expected reports on the U.S. economy. Such data bolster hopes that the economy can avoid a recession, particularly now that the Fed is cutting interest rates to support the job market instead of keeping them high to quash high inflation. But the surprising resilience is also forcing traders to downgrade their expectations for how deeply the Fed will ultimately cut rates.

    In stock markets abroad, indexes sank across much of Europe and Asia.

    South Korea’s Kospi dropped 1.5% for one of the larger losses after North Korea test launched a new intercontinental ballistic missile designed to be able to hit the U.S. mainland in a move that was likely meant to grab America’s attention ahead of Election Day.

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    Stan Choe, The Associated Press

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  • Making sense of the markets this week: October 27, 2024 – MoneySense

    Making sense of the markets this week: October 27, 2024 – MoneySense

    Despite these setbacks, CPKC posted an income gain of 7% year over year. The four categories that made the most impact were grain, energy, plastics and chemicals, and they grew revenues by 11%. CPKC says the shipment of wheat to Mexico from the Canadian and American Prairies over the past 12 months was exactly the type of “synergy win” that it was hoping for when the former Canadian Pacific acquired Kansas City Southern back in 2021. This railway remains the only one to span Canada, the United States and Mexico.

    CNR CEO Tracy Robinson commented on the railway’s operational challenges. “Our scheduled operating plan demonstrated its resilience in the third quarter, allowing us to adapt our operations to challenges posed by wildfires and prolonged labor issues,” she said. “Our operations recovered quickly and the railroad is running well. As we close 2024, we will continue to focus on recovering volumes, growth, and ensuring our resources are aligned to demand.”

    CNR’s revenues were up 3% year over year; however, increased expenses meant the company’s operating ratio rose 1.1% to 63.1% (indicating that expenses are growing as a share of revenue). The railway announced it was  raising its quarterly dividend from $0.79 to $0.845. This raise of nearly 7% is right in line with CNR’s mission to conservatively raise its dividend payouts each year.

    For more information on these railroads, check out my article on Canadian railway stocks at MillionDollarJourney.ca.

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    Rough day for Rogers 

    Thursday’s revenue miss left some Rogers shareholders shaking their heads. 

    Rogers earnings highlights

    Here’s what the large mobile company reported this week:

    • Rogers Communications (RCI/TSX): Earnings per share of $1.42 (versus $1.34 predicted) and revenues of $5.13 billion (versus $5.17 predicted).

    While solid earnings numbers did take away some of the sting, Rogers’ share price was down 3% on Thursday. Lower-than-expected numbers for new wireless customers were at the root of low revenue growth. The oligopolistic Canadian wireless market remains uncharacteristically competitive as Rogers, Telus and Bell all continue to fight for market share. That competition is hurting profit margins for all three telecommunications giants at the moment. (Unlike in past years, when the three telcos all enjoyed charging some of the highest wireless plan fees in the world.)

    One highlight for Rogers was its sports revenue vertical, which was up 11% from last quarter. Rogers has really doubled down on its sports media strategy over the last few years and now owns a controlling share of the: 

    • Toronto Blue Jays in the Major League Baseball league (MLB)
    • Toronto Maple Leafs in the National Hockey League (NHL)
    • Toronto Raptors in the National Basketball Association (NBA)
    • Toronto FC in Major League Soccer (MLS)
    • Toronto Argonauts in the Canadian Football League (CFL)
    • SportsNet, a major Canadian sports network
    • Toronto’s Rogers Centre and Scotiabank Arena venues
    • Naming rights of sports venues in Edmonton, Toronto and Vancouver
    • National NHL media rights in Canada
    • Local media rights to the NHL’s Vancouver Canucks, Calgary Flames and Edmonton Oilers
    • Partial local media rights to the Maple Leafs and Raptors
    • Several minor-league franchises and esports (gaming) teams

    Despite owning all those household-name sports assets, it’s worth noting that Rogers’ wireless and cable divisions were responsible for close to 90% of revenues, with sports and media making up the rest.

    Kyle Prevost

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  • Making sense of the markets this week: October 20, 2024 – MoneySense

    Making sense of the markets this week: October 20, 2024 – MoneySense

    Netflix shows a steady stream of profits

    Netflix (NFLX/NASDAQ) shareholders were happy on Thursday, as they saw share prices rise 5% in after-hours trading on the back of another excellent earnings announcement. (All figures in U.S. dollars.) Earnings per share came in at $5.40 (versus $5.12 predicted) and revenues were $9.83 billion (versus $9.77 billion predicted).

    Paid memberships also topped expectations, at 282.7 million, compared to the 282.15 million predicted by analysts. Netflix chalked up the increase in viewers to new hit shows such as The Perfect Couple, Nobody Wants This and Tokyo Swindlers, as well as new seasons of favourites Emily in Paris and Cobra Kai. Looking ahead to the next quarter, Netflix is banking on the new season of Squid Game and its foray into the world of live sports. Two National Football League (NFL) games and a massively anticipated boxing bout between Jake Paul and Mike Tyson represent new attractions for the streaming giant.

    Photo courtesy of United Airlines

    United Airlines shares take to the sky

    Tuesday was a massive earnings day for United Airlines (UAL/NASDAQ) as earnings per share came in at $3.33, well outpacing the $3.17 that analysts were predicting. (All figures in U.S. dollars.) Revenues were $14.84 billion (versus $14.78 billion predicted). Shares were up more than 13% on the outperformance and the news that the airline was starting a $1.5-billion share buyback program.

    Corporate revenue was up more than 13% year over year, while basic economy seat sales clocked an even more impressive 20% increase. Last week, the company announced new international routes headed to Mongolia, Senegal, Spain, Greenland and more.

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    The inflation dragon has been slain

    It doesn’t seem that long ago that annualized inflation rates were topping 8%, and there appeared to be no end in sight. Well, the end has arrived. Statistics Canada announced this week that the Consumer Price Index (CPI) annualized inflation rate for September had dropped all the way down to 1.6%. That’s substantially lower than the Bank of Canada’s 2% target.

    Led by deflation in clothing and footwear, as well as transportation, the downward trend appears to be widespread. Gasoline was also down 10.7% from this time last year.

    List of items contributing to decrease in CPI, September 2024

    Source: Statistics Canada

    Of course, increased shelter costs remain the major concern for many Canadians. Rent increases were up 8.2% year-over-year; while that’s down from August’s figure of 8.9%, it’s still a bitter pill to swallow for many.

    Kyle Prevost

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  • Making sense of the markets this week: October 13, 2024 – MoneySense

    Making sense of the markets this week: October 13, 2024 – MoneySense

    Canadian Natural Resources doubles down on Canada

    For a decade now, big acquisitions by Canadian oil-and-gas producers have mostly been met with distaste by investors. So we’ll take it as a heartening sign how well the markets received Canadian Natural Resources’ (CNQ/TSX) decision to buy the Alberta upstream assets of Chevron Corp. (CVX/NYSE) for USD$6.5 billion in cash. CNQ stock rose 3.7% Monday in the wake of the announcement. Chevron was up 0.7% on a day when oil prices increased.

    The assets in question comprise a 20% stake in the Athabasca Oil Sands Project, along with 70% of the Kaybob Duvernay shale play. That should add 122,500 barrels of oil equivalent per day to Canadian Natural Resource’s 2025 output, the company said. It also announced a 7% bump to its quarterly dividend, to 56.25 Canadian cents a share, beginning in January.

    Chevron explained the asset sale in terms of freeing up cash for U.S. shale acquisitions as well as targeted positions abroad, such as in Kazakhstan, which it considers to hold better long-term profit potential.

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    Nvidia moves up to number 2 in market cap

    Reports of the death of the Magnificent 7 tech stocks’ decade-long run are greatly exaggerated, Nvidia (NVDA/Nasdaq) seemed to say this week as its shares rose past $130. (All figures in U.S. dollars.) That pushed its market capitalization ahead of Microsoft Corp. to $3.19 trillion. That leaves only Apple, with a market cap of $3.4 trillion, worth more than the AI-focused chip-maker.

    Nvidia’s stock is up 26% in the past month, compared to a 6% advance for the S&P 500. Nvidia has grown tenfold in just two years. The price movement this week appeared to come from a positive report from Super Micro Computer, a provider of advanced server products and services. It found that sales of its liquid cooling products, deployed alongside Nvidia’s graphics processing units (GPUs), would be even stronger than expected this quarter. Analyst estimates of Nvidia’s adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the three-month period ended this month is $21.9 billion.

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    Pepsi earnings leave a sour taste

    Posting its second straight disappointing set of quarterly results on Tuesday, beverage-and-snack maker PepsiCo lowered its full-year guidance for organic revenue unrelated to acquisitions. 

    Results were hampered by recalls of the company’s Quaker Foods products, related to potential salmonella contamination. PepsiCo also experienced weak demand in the U.S. and business disruptions in some overseas markets, such as the Middle East. Pepsi’s North American beverage volumes fell 3% year-over-year, mostly due to declines in energy drink sales. Meanwhile, its Frito-Lay division suffered a 1.5% decline.

    “After outperforming packaged food categories in previous years, salty and savory snacks have underperformed year-to-date,” executives said in a prepared statement. Overall, PepsiCo revised its 2024 sales growth outlook from the previous 4% to low single digits.

    Michael McCullough

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