Market concentration in global stocks has now reached levels reminiscent of the 2000 Dot-Com bubble. As of July 2024, the technology, telecom, and healthcare sectors collectively account for 45% of global equities, marking a record high. This figure has increased by about 10 percentage points over the past four years, surpassing the previous peak of 44% during the Dot-Com bubble. In contrast, the financial, energy, and materials sectors have seen their share fall to 25%, below their levels in 2000.
The image shows a chart comparing the market capitalization of Tech/Telecom/Healthcare sectors versus Financials/Energy/Materials as a percentage of global equities from 1995 to 2025. The key points highlighted are:
– In 2000, during the Dot-Com bubble, Tech/Telecom/Healthcare peaked at 44% of global equities, while Financials/Energy/Materials were at 24%.
– In July 2024, the Tech/Telecom/Healthcare sectors reached a similar peak of 45%, while Financials/Energy/Materials dropped to 25%.
This suggests that market concentration in these sectors has reached levels similar to those during the Dot-Com bubble, raising concerns about potential risks.
This concentration poses risks similar to those seen during the Dot-Com era, where a subsequent market downturn saw tech, telecom, and healthcare stocks lose their dominance, allowing financials, energy, and materials to gain prominence. Today’s market, heavily weighted towards these three sectors, may similarly be vulnerable to shocks, especially given the limited diversification in the current market structure.
Stay informed with our financial updates, stocks, bonds, commodities. Get global & political insights. Follow us & enable notifications for the latest updates.
