S&P 500 Shiller CAPE Tops 41 as AI Rally Lifts Index 97% Since 2022

3 articles · Updated · The Motley Fool · Jul 15

The S&P 500's Shiller CAPE ratio has climbed above 41, putting the index at its second-richest valuation on record and near levels last seen around the dot-com bubble.
A 97% surge since the 2022 bear-market low—driven largely by the AI boom and soaring megacap tech valuations—has pushed the market to that extreme reading.
History makes the signal hard to ignore: the CAPE peaked above 44 in late 1999, and the S&P 500 later lost nearly half its value by its October 2002 bottom.
This cycle still differs from the dot-com era because today's biggest drivers, including the Magnificent Seven, are highly profitable businesses rather than largely speculative companies.
The report argues the bigger risk is capped future returns, not necessarily a crash, and says steady dollar-cost averaging remains a sensible long-term approach.