Opinion: The concentration of AI stocks has reached a level reminiscent of the eve of the "Tech Bubble" burst, bearing striking resemblance to several classic historical cases.

BlockBeats News, April 29th, according to Barchart, the current AI stock concentration has reached 41%, the same as historical cases such as the Nifty Fifty, the Japanese stock market, and the peak before the burst of the internet bubble.

The chart, combining BofA's Global Investment Strategy and Bloomberg data, shows that the current AI Top10 companies' weight in the S&P 500 has rapidly risen to 41%. This level is highly similar to several classic market bubble cases in history.

Most recently, we have the internet bubble of 1995-2000, where tech stocks dominated the NASDAQ. The NASDAQ index surged from about 750 points in 1995 to a peak of 5048 points in March 2000 (a roughly 600% increase). The tech/internet-related weight in the S&P 500 significantly rose, with the overall market concentrated in a few high-growth tech giants. Many companies reached extreme P/E ratios (the NASDAQ's overall P/E ratio once reached 200x).

After March 2000, factors such as rising interest rates, disappointed earnings expectations, and heavy insider selling triggered the collapse. The NASDAQ plummeted about 78-80% from its peak (to around 1139 points in October 2002), wiping out all gains from the bubble period. Many well-known dot-com companies (like eToys, Kozmo) went bankrupt or nearly to zero.

Subsequently, the tech sector as a whole suffered heavy losses, with the NASDAQ not reclaiming its 2000 peak until 2015. Market losses were estimated to exceed $5 trillion. However, a few quality companies (like Amazon, Cisco) survived long-term and recovered, ultimately proving the long-term value of some "stories," albeit requiring an extensive time to digest valuations.