Valuations exceed the Dot-com bubble peak
The S&P 500 is currently trading at approximately 3.7x sales, a record high and nearly 60% above its Dot-com bubble peak, according to Bloomberg Opinion. The MSCI World follows suit at around 3x. Framed this way, it feels like 2000 all over again.
However, the comparison has its limits; in 2000, many companies were generating sales without turning in a profit. Today, mega-cap tech stocks are significantly more profitable. Furthermore, the overall record is driven by a handful of heavyweights rather than the broader market.
Source: Global Markets
SanDisk: The giant stuck in a small-cap index
SanDisk remains in the MSCI World Small Cap index, but the classification has lagged behind market reality. The stock has surged over 4,000% in a year, fueled by demand for data center memory. Its float-adjusted market capitalization has reached $236bn in the MSCI factsheet, a far cry from the index median of $1.6bn.
The weighting highlights the discrepancy. SanDisk accounts for 2.20% of the index, compared to 0.26% for TechnipFMC. The stock represents 51% of the cumulative weight of the top 10 holdings. Since MSCI does not reclassify its constituents continuously, a small-cap ETF may hold a stock that no longer fits the profile until the next semi-annual review.
Source: MarketScreener
US active managers continue to lose ground against the S&P 500
US active managers are struggling. According to Bloomberg Intelligence, only 25% of large-cap funds have outperformed the S&P 500 since the start of 2026 (as of May 22), down from 28% in 2025 and 34% in 2024. This marks the fourth consecutive year of decline.
Our heatmap provides part of the explanation. Over three years, semiconductors have gained over 500%, software nearly 160%, and computer hardware has seen robust growth. Any manager with low exposure to these performance pockets starts with a significant handicap.
Source: Bloomberg Intelligence
