Driven largely by the ongoing artificial intelligence (AI) boom, the benchmark S&P 500 (SNPINDEX: ^GSPC) index has more than doubled from its bear-market low point in 2022, so investors have enjoyed spectacular returns over the last few years.
But the index currently trades at a Shiller Cyclically Adjusted Price-to-Earnings (CAPE) ratio of 41.9, making it the second-most expensive market in history, behind only the dot-com bubble in 2000. With ongoing geopolitical tensions in the Middle East, elevated inflation, rising government bond yields, and the upcoming midterm congressional elections in November, this may be a good time for investors to trim their market exposure.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a “Double Down” signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same “Total Conviction” signal is flashing for a company 1/100th the size of Nvidia. Continue »
Stocks with high valuations tend to be the most vulnerable to steep declines during broad-market sell-offs, as investors tend to take such events as cues to cash out of their bigger winners and reduce the level of risk in their portfolios. I’ve identified two popular technology stocks trading at sky-high valuations now that might be worth selling if the S&P 500 starts to head south.
The first stock to sell: Advanced Micro Devices (AMD)
Advanced Micro Devices (NASDAQ: AMD) has become a leading supplier of graphics processing units (GPUs), the primary type of processor used to power workloads in AI development. It’s one of the only chipmakers genuinely competing with Nvidia, which currently leads this market.
AMD will start shipping its new MI450 GPUs over the next few months, which are expected to be comparable to Nvidia’s Vera Rubin chips. In fact, when paired with the Helios data center rack, which includes specialized software and networking hardware, the MI450 could deliver 15% more processing power with 30% better cost efficiency than anything else on the market.
Companies like OpenAI, Microsoft, Meta Platforms, and Anthropic plan to deploy several gigawatts’ worth of computing capacity over the next few years using AMD’s GPUs, starting with the MI450. This will help the company capture a meaningful slice of what CEO Lisa Su believes will be a $1.4 trillion market by 2030.
During the second quarter of 2026, AMD’s data center revenue more than doubled year over year to a record $6.7 billion. It accounted for more than half of the company’s total revenue of $11.5 billion, underscoring how important AI GPUs and components have become to the business.
