AI Market Rally Shows Cracks as Semiconductors Lag S&P 500 – Tom Essaye
Sevens Report founder warns of late-cycle risks amid slowing economic data
BofA Warns of Dotcom Bubble Vibes in S&P 500 Valuations
Bank of America analysts compared today’s valuations to the late-1990s dotcom bubble, and Sevens Report Research founder Tom Essaye echoed those concerns. He noted that the AI-driven rally may be masking underlying risks, particularly in semiconductors.
“The SOX index isn’t keeping pace with the S&P 500, and that’s a red flag,” Essaye said, pointing out that chip stocks are the backbone of AI innovation. “If semis can’t lead, then it calls into question the sustainability of this rally.”
Essaye also flagged weakening economic indicators, including soft job gains and rising jobless claims, as evidence that the U.S. may be entering a late-cycle phase. Together, those factors increase the risk that today’s market exuberance could mirror past bubbles.
Also, click here to view the full article on Ainvest.com published on August 15th, 2025. However, to see the Sevens Report’s full comments on the current market environment sign up here.
If you want research that comes with no long term commitment, yet provides independent, value added, plain English analysis of complex macro topics, then begin your Sevens Report subscription today by clicking here.
To strengthen your market knowledge take a free trial of The Sevens Report.
Join hundreds of advisors from huge brokerage firms like Morgan Stanley, Merrill Lynch, Wells Fargo Advisors, Raymond James, and more! To start your quarterly subscription and see how The Sevens Report can help you grow your business, click here.
