By Roger Montgomery
Publication Date: 2025-11-28 04:13:00
Why the AI boom could leave investors licking their wounds
With 30 percent of the U.S. S&P 500 index trading at more than 10 times sales and 13 percent of the index-weighted S&P 500 trading at 20 times price-to-sales (P/E) ratio (a level that now exceeds the 1999-2000 tech boom), we will take a break this week from commenting further on market valuations and leave it to you to to decide whether it makes sense to invest completely in stocks or to be diversified.
This article was first published in The Australian on November 21, 2025.
Perhaps more interesting is the idea that a single sector drives the U.S. economy; Investments in artificial intelligence (AI) infrastructure that offset weakness in other sectors. The AI boom is of course driving the stock market. And because of this, the US finds itself in a dilemma. If the government tries to achieve more balanced or stable growth, it could trigger a stock market decline…
