In recent months, there has been significant attention on the remarkable surge in technology stocks, particularly those linked to artificial intelligence , said analysts at Wells Fargo in a note.
In the late 1990s, the internet revolutionized industries, driving substantial growth in tech stocks. Similarly, AI is currently viewed as a transformative technology with the potential to significantly enhance business efficiencies, Wells Fargo added. In contrast, as of the latest readings, these figures have risen to 30% and 39%. This increased concentration indicates that today's market is even more dominated by a few large-cap stocks, primarily in the tech sector, compared to the late 1990s.One of the most significant differences between the two periods is the quality of the leading companies. Today’s market leaders consist of higher-quality companies with strong balance sheets and profitable operations.