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Investors are paying record prices for every dollar of future S&P 500 revenue

The current market is a Rorschach test; do you see a golden age of corporate profitability ushered in by AI, or irrational exuberance gone mad?

Hyunsoo Rim

9/1/25 11:14AM

US stocks may be breaking new ground, but with every fresh high, the chorus of people asking “are stocks overvalued?” gets a little bit louder.

According to The Wall Street Journal, the S&P 500 now trades at about 22.5x projected earnings for the next year, well above the three-decade average of 17.1x and inching closer to the dot-com peak of over 25x in 1999.

Things look even more stretched on a price-to-sales basis: the index is now at a record 3.2x forward revenue — 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.

All eggs in tech

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

Nvidia, for example, has an operating profit margin near 60%, and it alone represents more than 7% of the index, dominating 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 of sectors, including names like Exxon, IBM, Walmart, and Coca-Cola.

Put simply: stocks are undeniably expensive, whether measured on profits or sales. Whether you think that’s a problem depends a lot on whether you think the BATMMAAN stocks are about to collectively stumble.

Tasha Matsumoto, Matt Phillips

16h

The S&P 500, Nasdaq 100, and Russell 2000 close at record highs again as Strait of Hormuz is declared open

Stocks reached new record highs as risk-on sentiment flooded back into the markets, while oil tumbled.

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Matt Phillips20h

With their recent surge, Intel shares just hit their highest level since the dot-com era

Intel’s surge of nearly 60% this month has the iconic American chipmaker’s stock price approaching levels last seen during the dot-com era. Bloomberg noted that shares just touched their highest intraday level since the turn of the century:

“The stock rose as much as 1.5% to $69.55, topping a peak it hit on Jan. 24, 2020. The shares are up 90% this year, after soaring 84% in 2025. Intel is now roughly 8% from its all-time closing high of $74.88, established on Aug. 31, 2000.”

That’s just the most recent late-’90s-era throwback we’ve been seeing in tech shares lately. Oracle is currently pacing for its best week since late 1999.

What’s even more remarkable, however, is that Intel’s forward price-to-earnings ratio today dwarfs the premiums the market was putting on the stock during the nuttiness of the dot-com mania.

That reflects the fact that the recent run-up in Intel shares is, essentially, giving the chip giant credit for a massive turnaround that hasn’t actually happened yet.

One also might wonder if the fact that Intel is partially owned by the US government means it’s more attractive — and therefore worth a higher premium — than other chipmakers without the state imprimatur.

Still, kind of startling.

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Netflix sinks following disappointing outlook as investors wait for more ad growth

Netflix shares are down more than 10% on Friday morning.

Max Knoblauch21h

J. Edward Moreno21h

Eli Lilly’s GLP-1 pill hit nearly 1,400 prescriptions in first week

Eli Lilly rose after preliminary numbers cited by Wall Street analysts showed strong uptake of its new weight-loss pill.

The FDA approved Foundayo on April 1 and shipments began on April 9. In its first week, roughly 1,400 US prescriptions were written for the drug, according to IQVIA data cited by Deustche Bank analysts in a Friday note.

Novo Nordisk, Lilly’s rival in the GLP-1 market, released its GLP-1 pill earlier this year, and early signs show that it’s expanding the market, inviting patients who were turned off by weekly injections. Novo’s pill had a stronger first week than Lilly’s, with its Wegovy pill hitting 3,071 US prescriptions in the first four days after its launch on January 5.

Lilly’s pill has an advantage over Novo’s, which is that it can be taken at any time of day, with or without food. Lilly disclosed in a February regulatory filing that it had $1.5 billion worth of prelaunch inventory ready ahead of the FDA approval — which is about as much as analysts polled by FactSet expect it to sell this year.

Eli Lilly makes the world’s bestselling drug. Can it keep the party going?

Claire Yubin Oh22h

Critical Metals jumps after Greenland’s government approves CRML to take majority control of the Tanbreez mining project

Critical Metals is up more than 25% in premarket trading on Friday after the critical mining company announced that it now owns 92.5% of the Tanbreez rare earth deposit following an approval from the government of Greenland.

With that latest government support, Critical Minerals added an additional 50.5% stake to its ownership, reportedly acquired from Rimbal Pty Ltd, per Bloomberg News. With access to eight heavy rare earth elements often used in consumer electronics and defense, the site is one of the world’s largest undeveloped rare earth deposits and a key source of rare earth supply outside of China, according to the company.

In Critical Metals’ press release, Chairman Tony Sage commented that the approval “removes the most significant structural overhang on the project and provides the clarity to advance Tanbreez to production with confidence,” especially as Tanbreez’s location offers a significant logistical advantage through its year-round direct shipping access, compared to rival projects.

With 92.5% of the project now vested in Critical Metals Corp., and the remainder owned by European Lithium Ltd., CRML now has full control of the project and is seeking to accelerate development there, with plans for a new international airport and a “150-tonne bulk sample program,” which is slated for June 2026.