{"id":37357,"date":"2025-09-01T22:22:08","date_gmt":"2025-09-01T22:22:08","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/37357\/"},"modified":"2025-09-01T22:22:08","modified_gmt":"2025-09-01T22:22:08","slug":"investors-are-paying-record-prices-for-every-dollar-of-future-sp-500-revenue","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/37357\/","title":{"rendered":"Investors are paying record prices for every dollar of future S&P 500 revenue"},"content":{"rendered":"

US Stocks may be breaking<\/a> new ground, but with every fresh high, the chorus of people asking \u201care stocks overvalued?\u201d gets a little bit louder.<\/p>\n

According to the Wall Street Journal<\/a>, the S&P 500 now trades at about 22.5\u00d7<\/b> projected earnings for the next year, well above the three-decade average of 17.1\u00d7, and inching closer to the dot-com peak of over 25\u00d7 in 1999.<\/p>\n

\"SP500<\/p>\n

Sherwood News<\/p>\n

Things look even more stretched on a price-to-sales basis: the index is now at a record 3.2\u00d7<\/b> forward revenue \u2014 meaning investors are paying more than ever for every dollar of sales the S&P 500 companies are expected to generate over the coming 12 months.<\/p>\n

All eggs in tech<\/p>\n

In fact, the split between the two ratios shows a deeper issue in today\u2019s market: its reliance on Big Tech. The 10 largest companies of S&P 500 now make up<\/a> nearly 40%<\/b> of the index’s total value, and most of them are mega-profitable, mega-cap tech stocks \u2014 their tasty margins keeping a lid on the P\/E ratio.<\/p>\n

Nvidia<\/a>, for example, has an operating profit margin near 60%, and it alone represents<\/a> more than 7%<\/b> of the index \u2014 dominating<\/a> the S&P 500 more than any company has for 44 years. Back in 1990, by contrast, the top 10 companies were less dominant and came from a more varied mix <\/a>of sectors, including names like Exxon, IBM, Walmart, and Coca-Cola.<\/p>\n

Put simply: stocks are undeniably expensive, whether measured on profits or sales. Whether you think that\u2019s a problem depends a lot on whether you think the BATMMAAN stocks<\/a> are about to collectively stumble.<\/p>\n","protected":false},"excerpt":{"rendered":"US Stocks may be breaking new ground, but with every fresh high, the chorus of people asking \u201care…\n","protected":false},"author":2,"featured_media":37358,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[175],"tags":[79,18,19,17,188],"class_list":{"0":"post-37357","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-markets","8":"tag-business","9":"tag-eire","10":"tag-ie","11":"tag-ireland","12":"tag-markets"},"share_on_mastodon":{"url":"","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/37357","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=37357"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/37357\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/37358"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=37357"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=37357"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=37357"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}