Top Tech Stocks Now Eclipsing 2000-Era Bubble Peaks

  • The peak of the Dot Com Bubble included domination by a handful of tech names.
  • These market cap giants of the era singlehandedly supported inflated markets.
  • A similar class of concentrated tech domination has materialized in today’s markets as well.
  • The nearly seven-year-old bull market has shown its first major signs of weakness in 2015, as investors have begun to grow uneasy about high share prices, emerging market stability and weak commodity demand. With the S&P 500 now sitting more than 30 percent above its pre-Financial Crisis top, traders can’t help drawing comparisons to previous market peaks./p>

    In a new report, MKM Partners analyst Jonathan Krinsky compared the size and dominance of a handful of tech companies to a similar situation that developed in U.S. markets during the height of the Dot Com Bubble in the late 1990s.

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    The Four Horsemen Of The Dot Com Bubble

    While the Dot Com Bubble notoriously involved hundreds of nearly worthless companies with elevated market valuations, not all of the high-flying stocks were simply smoke and mirrors. At the market’s peak in March of 2000, Dell, Cisco Systems, Inc. CSCO, Intel Corporation INTC and Microsoft Corporation MSFT, collectively referred to as the “Four Horsement” of the tech world, had a combined market cap of about $1.7 trillion.

    Krinsky pointed out that these four companies were single-handedly supporting the U.S. markets at times.

    The Rise Of F.A.N.G.

    In today’s market, the tech world is again being dominated by four high-flying stocks with a combined market cap of nearly $1.2 trillion and questionably high valuations.

    F.A.N.G. is comprised of Facebook Inc FB,, Inc. AMZN, Netflix, Inc. NFLX and Alphabet Inc GOOGL GOOG. “Perhaps there is more room to run based on the late 90’s precedence, but they have certainly come a long way,” Krinsky added.

    G.A.M.A. Domination

    If Google and Amazon are grouped instead with Microsoft and Apple Inc. AAPL, the four G.A.M.A. stocks now have a combined market cap that makes up 35 percent of the Nasdaq 100. In addition, their combined market cap of $1.9 trillion now exceeds the peak combined market cap of the Four Horsemen of the Dot Com Bubble.

    Disclosure: The author holds no position in the stocks mentioned.

    Image Credit: Public Domain
    Posted In: Analyst ColorLong IdeasTop StoriesAnalyst RatingsTechTrading IdeasDELLJonathan KrinskyMKM Partners