S&P 500 Shiller P/E Ratio Reaches 42.2, Highest Level Since Dot-Com Bubble Peak of 44.2 in November 1999
Analysis from The Motley Fool highlights that the S&P 500's cyclically adjusted P/E (CAPE) ratio, also known as the Shiller P/E, has climbed to 42.2. This valuation metric, which averages earnings over 10 years and adjusts for inflation, is now at its highest point since the dot-com bubble, when it peaked at 44.2 in November 1999. While acknowledging the historical parallel, the analysis notes that the current market's high valuation is largely driven by profitable big tech companies and the AI boom, differing from the unproven internet businesses that characterized the dot-com era.
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