The issue that frightens investors in the US markets and is constantly being talked about by those who know the old hat: Shortness of Breath

Because the majority of the stock market returns still come from a few giant companies.

While the rally has broadened somewhat, a few stocks still dominate the market.

The top 10 companies (Nvidia, Microsoft, Apple, Amazon, Alphabet, Meta, Broadcom, Tesla, Berkshire Hathaway, and JPMorgan Chase) account for the following percentages:

- 40% of the total value of the S&P 500

- 56% of the increase since the bottom on April 8

- 31% of the revenue growth over the last 12 months

- 55% of the net profit growth over the last 12 months

- 69% of the capital expenditure growth over the last 12 months

What do these figures tell us?

These companies (perhaps with the exception of Tesla) deserve high valuations because both their revenue and profitability are growing much faster than other companies.

So, are these companies expensive?

As you know, those who memorize this topic love to reference the .com bubble of 2000.

But today's situation is very different.

During the .com bubble, Cisco traded at 85x forward P/E, and Oracle at 90x.

Today, Alphabet is at 20x, and Broadcom at 43x. Furthermore, most of the 2000 crash occurred in unprofitable, smaller technology companies.

Admittedly, today's top 10 companies aren't particularly cheap either. But they're nowhere near the valuations they were during the .com crisis (with the exception of Tesla).

Could these companies' valuations be adjusted?

Of course.

But comparisons to the 2000 bubble and fears of market recession aren't very meaningful.