S&P 500 forward P/E rises above historical averages on AI enthusiasm

9 articles · Updated · The Motley Fool · May 1

The index's forward price-to-earnings ratio stands at 20.9, above its five-year average of 19.9 and 10-year average of 18.9.
The report says resilient corporate profits and the heavy influence of a few megacap stocks are helping sustain richer valuations despite high interest rates and geopolitical uncertainty.
It compares current conditions with the dot-com bubble and 2020, when elevated multiples later reversed, and advises diversification, liquidity, quality companies and valuation discipline.

Is the massive gap between AI spending and revenue a bubble's warning sign or the necessary cost of innovation?

Beyond stocks, how is the AI boom concentrating systemic risk in the global credit and pension systems?