LIVE MARKETS-How much AI is too much?
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HOW MUCH AI IS TOO MUCH?
As SpaceX, OpenAI and Anthropic race toward potentially trillion-dollar public listings, Bank of America makes some interesting observations about the growing tech concentration in U.S. stocks.
The high-flying IPOs, along with large tech companies, could account for almost half of the U.S. stock market's value, according to BofA's weekly "Flow Show" report published on Friday.
That would surpass every bubble in the market history barring U.S. railroads' dominance during the 1880s, when their concentration surged to 63%, BofA said.
"Add mega IPOs to AI big boys and market concentration easily surpasses bubbles of roaring '20s, Nifty 50 '70s, Japan '80s, TMT '90s," the note said.
Still, BofA says no one is cutting their long positions in U.S. stocks before the historic IPOs.
BofA calls it the AI Big 10, which includes the Magnificent Seven group - Nvidia, Apple, Amazon, Alphabet, Microsoft, Meta Platforms, Tesla - and Broadcom, Micron Technology and Advanced Micro Devices AMD.O, whose market values have soared in recent weeks.
The AI Big 10 currently accounts for more than 40% of the S&P 500's weight.
(Sruthi Shankar)
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