4 Charts That Show The A.I. Bubble Is A Myth
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The S&P 500 is up 8% year-to-date and the Nasdaq has gained 11% in the same timeframe. The perma bears don’t like nice things though, so they are all doing their best impressions of Michael Burry in 2007.
“Bubble! A crash is coming! The next global financial crisis is upon us!”
These are examples of the sentiment coming from the pessimist crowd. The media is not immune from this nonsense either. Here is a list of recent headlines from media outlets:
New York Times: “The A.I. bubble is coming for your retirement account.”
Axios: “Revenge of the A.I. bubble”
The Guardian: “When the AI bubble bursts, what will Australia do with the tools it built? One man thinks he has the answer.”
The Atlantic: “The A.I. bubble is no ordinary bubble”
Financial Times: “Portfolio construction in the shadow of the A.I. bubble”
The Telegraph: “The real AI bubble is dangerously hidden.”
Investing.com: “SK Hynix’s US share premium flashes another AI bubble warning”
The funniest part about these headlines is they are written as if the A.I. bubble is a widely accepted fact and now everyone is just trying to figure out what to do about it. These folks couldn’t be more wrong though. I have the data to prove it too.
Adam Kobeissi shows “the S&P 500’s net profit margin is on track to surge to 15.7% for Q2 2026, the highest in data going back to 2009. If the current margin holds, it will mark the 10th consecutive quarterly increase.
Meanwhile, 86% of reporting S&P 500 firms have so far beaten EPS estimates, while 80% have exceeded revenue expectations. AI is driving historic earnings growth.”
These are truly breathtaking numbers. The largest companies in America are driving net profit margin growth at the highest rate in nearly 20 years. That isn’t hype and it isn’t future dreams. This is a positive development in the answer to one of the most important questions on Wall Street: how much money are you making?
As if the Q2 numbers weren’t good enough, Carson Group’s Ryan Detrick points out estimated 2027 earnings-per-share (EPS) has officially cracked $400. If this is accurate, EPS would have experienced a mind-boggling 4x increase since 2012.
So you want to know why company stock prices are skyrocketing? Because they are making 4x more money than they were less than 15 years ago.
If you continue pulling on that thread, the P/E multiples right now are not even in the same zip code as the 2000 tech bubble. Mike Zaccardi writes “Nasdaq 100 P/E was 86x in May 2001... its 24x today.”
Again, I am not saying there won’t be a bubble that pops at some point in the future, but I am showing you data that proves we are nowhere near that bubble right now. It is your choice to believe the data or not.
Lastly, before I let you go, I will leave you with this chart from Merrill Lynch (which originally was Ryan Detrick’s idea I am pretty sure). This shows “the S&P 500 has gained around 110% since October 2022. Historical comparisons suggest the rally may still have room to run, as bull markets since 1949 have averaged around 192% returns over around 5.5 year”
The pessimists are loud. They sound smart. But always remember, they rarely make money. And I don’t think the historical trend is going to change any time soon.
Hope everyone has a great start to your week. I will talk to you next time.
- Anthony J. Pompliano
Founder & CEO, ProCap Financial (Nasdaq: BRR)
Bitcoin's Turn Is Next — The Easy Money AI Trade Is Over?
Jordi Visser is a veteran macro investor with 30+ years of experience and the author of the VisserLabs Substack.
In this conversation, we break down the AI trade — Chinese open-source models catching up, Google's massive CapEx bet, and the memory shortage bottlenecking it all. We also cover Travis Kalanick's stealth robotics empire, what AGI in three years means for jobs and the Fed, and where Bitcoin, Ethereum, and the Clarity Act go next.
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The charts people should be worrying about are not the S&P 500 or Nasdaq. It’s the 90%+ of the disenfranchised, disillusioned, disgruntled population who are not participating in AI or asset gains. Pitchforks and Torches charts.
Isn't that backward looking, not taking into account existing and forward looking market conditions?