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The Shiller cyclically adjusted price-to-earnings ratio has risen to nearly 41, a level far above the historic average of 17.8 and approaching values not seen since the dot-com bubble burst.
This indicator suggests that current stock prices are overvalued relative to 10 years of inflation-adjusted earnings. The current bull market has seen significant gains over the past three years.
The S&P 500 is up 78%, the Nasdaq Composite has surged 99%, and the Dow Jones Industrial Average has risen 53%.
Despite these broad index increases, market performance is heavily concentrated in artificial intelligence stocks.
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