Recent market trends reveal that the top-performing stocks are experiencing significant gains, yet they do not mirror the explosive increases seen during the dot-com bubble. In 2025, the average top-10 performer within the S&P 1500, which is a broad benchmark combining large-cap, mid-cap, and small-cap stocks, posted an impressive gain of approximately 240%. This figure, however, falls short of the staggering 606% average return by the top 10 stocks back in 1999.
The S&P 1500 represents about 90% of the total U.S. market capitalization, providing a comprehensive view beyond just the megacap focus that often dominates stock discussions. Historical data indicates that while triple-digit returns may seem indicative of a bubble, they do not necessarily warrant alarm. Since 1996, the average gain for the top 10 stocks has been around 220% over a full calendar year, suggesting that high returns can occur in a healthy market.
Delving deeper into the dynamics between winning and losing stocks, a stark picture emerges. In 2025, the average stock in the top 10% outperformed the bottom 10% by about 125 points. While this gap might suggest a market skewed toward a select few winners, it is noteworthy that this spread is below the 30-year historical average and approximately half of what was recorded during the height of the 1990s boom.
Despite these insights, the current market cannot be entirely disregarded. The influence of artificial intelligence continues to propel a substantial portion of the recent rally, yet a closer examination indicates a less robust market breadth when these standout performers are excluded.
Ultimately, defining a bubble involves more than just identifying a few big winners. A true bubble is characterized by a dramatic separation between winners and losers, much like the stock market experienced in 1999. By this metric, today’s market does not yet cross that critical threshold, suggesting a more tempered environment for investors.
