And today in AI stock bubble-watching news…
**Quick insight: **AI stock concentration has reached the same level that resulted in the bursting of previous bubbles, Bank of America strategists pointed out.
The "AI Big 10" now make up 41% of the S&P 500 (^GSPC), similar to the share of tech and telecom during the dot-com bubble.
The 10 companies making up BofA's AI Big 10 are Nvidia (NVDA), Microsoft (MSFT), Alphabet (GOOG, GOOGL), Amazon (AMZN), Meta (META), Apple (AAPL), Tesla (TSLA), Broadcom (AVGO), Micron (MU), and Advanced Micro Devices (AMD).
The why: The Nasdaq Composite (^IXIC) delivered a blockbuster performance in the second quarter of 2026, surging 21.4% to post its best quarterly run since the post-pandemic rebound of 2020.
The explosive growth was primarily fueled by an unrelenting investment boom surrounding artificial intelligence infrastructure. That propelled semiconductor hardware heavyweights such as AMD and memory suppliers like Micron to record highs.
Momentum in tech was further amplified by the mid-June IPO of Elon Musk's SpaceX (SPCX). The tech-heavy index did experience a minor 2.8% pullback in June as investors briefly rotated capital into small caps and worried about Big Tech's AI capital expenditures.
Bottom line: If the bullish AI trade is going to be tested, it will come in the current quarter.
For one, the drivers of the 2026 AI trade are now well known, lessening the likelihood of positive surprises when earnings season begins shortly. And more hawkish talk on interest rates from new Fed Chairman Kevin Warsh is likely. That would be unwelcome for high-multiple stocks in the AI sector. "I think the gains can continue. But I think that the narrative is going to change a little bit," Portfolio Wealth Advisors chief investment officer Lee Munson said on Yahoo Finance's Opening Bid. "This is less about the earnings bubble in Micron … But I think investors are starting to talk about why we have the Magnificent Seven stocks becoming the Lag Seven — what are people getting for buying all those pickaxes and shovels."
Brian Sozzi* is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X** @BrianSozzi**,** Instagram**, and** LinkedIn**. Tips on stories? Email brian.sozzi@yahoofinance.com.*
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