- Apollo’s Torsten Slok says today’s AI bubble is more extreme than the 1990s dot-com craze.
- Top 10 S&P names carry the bubble risk—ETFs like RSP or PSQ offer ways to hedge.
- Up Next: Get 5 Dark Horse Stocks Wall Street Is Quietly Loading Up On
Today's AI-fueled market frenzy is even more dangerously inflated than the 1990s internet bubble that ended with a historic crash in 2000.
That’s according to Apollo's chief economist Torsten Slok. This time, it's not just hype—it’s concentrated, institutional, and sitting atop the S&P 500's biggest names, he adds.
Related: The Last Time This Warning Flashed, S&P 500 Crashed The Most Since 2008
Top-Heavy Trouble
Back in 2000, the top 10 companies in the S&P 500 had a price-to-earnings (P/E) ratio of 25—lofty, but still loosely tethered to fundamentals. Today? That same top 10 group, now dominated by AI darlings like Nvidia Corp NVDA, Microsoft Corp MSFT, and Alphabet Inc GOOGL GOOG, carries a P/E of 25 once again… but with far more weight.
What's different now, Slok warns, is that the rest of the market isn't anywhere near as stretched. The top-heavy S&P is showing signs of structural imbalance—making the AI bubble both narrower and potentially more dangerous.
| Year | Top 10 (P/E) | Excluding Top 10 (P/E) | S&P 500 (P/E) |
|---|---|---|---|
| 1990 | 15 | 10 | 10 |
| 1995 | 20 | 15 | 15 |
| 2000 | 25 | 15 | 15 |
| 2005 | 15 | 15 | 15 |
| 2010 | 10 | 15 | 15 |
| 2015 | 20 | 15 | 15 |
| 2020 | 30 | 20 | 20 |
| 2025 | 25 | 20 | 20 |
While the overall S&P 500 P/E ratio sits at a seemingly reasonable 20, the ex-top-10 group has a P/E of just 20, indicating that the bulk of the valuation risk sits squarely on the backs of a few AI titans. If sentiment cracks, the fallout won't be gradual—it'll be violent.
How To Hedge Or Harvest The AI Mania
For investors seeking to navigate the storm, ETFs provide a practical way to express their views. If you believe the bubble still has room to inflate, the Global X Robotics & Artificial Intelligence ETF BOTZ gives exposure to a broad range of AI-focused companies.
But if you’re feeling the chill from Slok's warning, consider defensive hedges like the Invesco S&P 500 Equal Weight ETF RSP, which dilutes mega-cap exposure, or ProShares Short QQQ PSQ to bet against the froth.
With valuations this stretched and history offering a sobering mirror, the AI trade might not end in a bang—but it could still blow up.
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