Tech Stock Concentration Nears Dotcom Bubble Heights But Valuations Less Frothy
• Concentration in the stock market is nearing 2000 dotcom bubble levels, with top 5 stocks accounting for 21.7% of market cap
• Information technology remains the dominant sector among the top 10 largest companies, similar to the dotcom bubble
• Valuations for top 10 largest stocks are high at 26.8x forward earnings, but lower than 41.2x dotcom peak
• Top 10 stocks are commanding the highest premium to earnings over rest of market on record
• Outperformance by mega-cap tech stocks may be due for a period of mean reversion based on historical trends