![\"Warren](\"https:\/\/www.europesays.com\/people\/wp-content\/uploads\/2026\/06\/news-p.v1.20260611.3dd9a55e2c014bb793d912e7c67374ab_P1.jpg\"\/ "\\"'Buffett")
Warren Buffett. AP\/Yonhap News<\/p>\nWarren Buffett. AP\/Yonhap News<\/p>\n
As New York stocks continue their steep climb on the back of the artificial intelligence (AI) boom, the “Buffett Indicator” has hit a record high, warning of severe overvaluation in the US stock market.<\/p>\n
Stock Market More Than Doubles Real Economy, First Time Since 1970<\/p>\n
The Buffett Indicator recently reached 232.5%, its highest level on record, according to Yahoo Finance on Monday. Based on data compiled by financial analysis platform GuruFocus, the indicator surged 13% from its March 30 low and marked the highest reading since related data began being compiled in 1970.<\/p>\n
The Buffett Indicator divides the total market capitalization of the US stock market (the Wilshire 5000 Index) by annual nominal gross domestic product (GDP). It is regarded as a leading gauge of how inflated the stock market is relative to the real economy.<\/p>\n
A Buffett Indicator of 100% means stock prices are equal to GDP, while a reading above 200% is typically read as a signal of overvaluation. The indicator spread among investors after Warren Buffett introduced it in a 2001 article for Fortune magazine.<\/p>\n
At the time, Buffett said, “Though this indicator has limitations, it is probably the best single measure of where valuations stand at any given moment.”<\/p>\n
The Buffett Indicator currently stands in the “significantly overvalued” zone. Yahoo Finance also cited an analysis that, if the current level is maintained, US stocks could post negative returns over the next year.<\/p>\n
Buffett Also Bets on AI, Yet Overheating Alarms Remain<\/p>\n
Still, it is worth noting that Buffett himself is betting on the growth potential of the AI industry. Berkshire Hathaway holds a large stake in Apple shares and has recently increased its investment weighting in Alphabet, Google’s parent company. Greg Abel, who took the helm of Berkshire Hathaway as Buffett’s successor, is also reportedly pursuing a $10 billion (about 15.295 trillion won) investment plan to support Alphabet’s expansion of AI infrastructure.<\/p>\n
Nevertheless, wariness over an overheated market remains widespread. Yahoo Finance, citing a report by Goldman Sachs equity strategist Ben Snider, reported that trading activity in US companies with high enterprise value-to-sales ratios (EV\/Sales) has reached its highest level in decades. Excluding the dot-com bubble period of 2000, it is the highest record ever.<\/p>\n
“The recent stock market rally has been so fast that it is raising investor anxiety,” Snider explained. “As questions grow over how long the bull market can last, there is also an increasingly active search for signals to determine whether the market peak is imminent.”<\/p>\n","protected":false},"excerpt":{"rendered":"Warren Buffett. AP\/Yonhap News As New York stocks continue their steep climb on the back of the artificial…\n","protected":false},"author":2,"featured_media":110211,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[162],"tags":[4677,56583,1144,11175,624,56582,669,56584],"class_list":["post-110210","post","type-post","status-publish","format-standard","has-post-thumbnail","category-warren-buffett","tag-ai-boom","tag-alphabet-investment","tag-berkshire-hathaway","tag-buffett-indicator","tag-goldman-sachs","tag-us-stock-market-overvaluation","tag-warren-buffett","tag-wilshire-5000"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@people\/116733834004913482","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/110210","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/comments?post=110210"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/posts\/110210\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media\/110211"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/media?parent=110210"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/categories?post=110210"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/people\/wp-json\/wp\/v2\/tags?post=110210"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}