A Wall Street economist warns of sky-high valuations in AI stocks, comparing them to the late 90s tech bubble. P/E ratios of top S&P 500 companies like Meta and Nvidia have surpassed dot-com bubble levels. Concerns grow over an investor concentration in tech giants, signaling a potential market pullback.

BTIG analysts raise red flags on frothy market sentiment, especially in high-flying AI stocks. The BUZZ NextGen AI Sentiment Index is up 45% in 16 weeks, trading 29% above its 200-day moving average. Top holdings like Rocket Lab and Coinbase show vulnerable chart patterns, prompting caution among investors.

Apollo and BTIG notes highlight a market split between long-term optimism in AI’s potential and near-term concerns over valuations. Analysts suggest rotating into defensive sectors like utilities or Chinese tech amid growing unease over speculative tech stocks. Concerns linger about the sustainability of current megacap tech valuations.

Read more at Yahoo Finance: AI mania is worse than 1999’s tech bubble, Apollo’s top economist warns