Another Sign the Blow-Off Top Is Coming

Chipmaker Nvidia is up over 500% in the past five years. Its market cap, closing in on $5 trillion, boggles the mind. That’s just one reason why it reminds one of Cisco during the dotcom bubble.

Yet, shares trade at 50 times earnings — pricey even for a growth stock — but nowhere near the 500 times earnings of Palantir.

In 2020, you could have bought shares of Nvidia at 50 times earnings. And in 2025. The fact of the matter is, Nvidia’s valuation has held fairly steady – with its share price soaring as its earnings soar.

That’s also a big drive for the massive rally in the S&P 500:

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There’ s still more room for stocks to run as prices haven’t yet exceeded earnings growth (Source: Carson)

If history continues to rhyme, we expect a final parabolic move higher to be in the works for the stock market. One that may kick off near the end of the year and move into 2026.

That final push higher will finally see a divergence – with soaring stock prices amid a backdrop of slowing – or even evaporating – earnings.

When that happens, retail investors who would usually be cautious on stocks may throw that caution to the wind, just as cautious investors in 1997 and 1998 joined the relentless bull market mentality in 1999 – and the playout of our forecast for a terrifying bull.

~ Addison

P.S. Exuberance for AI has forced a massive concentration in a historically few stocks such as Nvidia. Fortunately, there are pockets of extreme value elsewhere in the market.

That includes materials, commodities, mining and energy stocks, as the Trump administration pushes for a stronger industrial policy and more domestic production.

Gold, jumping to $3,850 this morning, will likely catch retail interest as central banks push prices higher and the Trump administration forces monetary changes. Our forecast for significantly higher gold prices continues to move in the right direction, and can play out even as the AI bubble meets its inevitable pin.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

Chipmaker Nvidia is up over 500% in the past five years. Its market cap, closing in on $5 trillion, boggles the mind. That’s just one reason why it reminds one of Cisco during the dotcom bubble.

Yet, shares trade at 50 times earnings — pricey even for a growth stock — but nowhere near the 500 times earnings of Palantir.

That’s also a big drive for the massive rally in the S&P 500:

Turn Your Images On

There’ s still more room for stocks to run as prices haven’t yet exceeded earnings growth (Source: Carson)

If history continues to rhyme, we expect a final parabolic move higher to be in the works for the stock market. One that may kick off near the end of the year and move into 2026.

That final push higher will finally see a divergence – with soaring stock prices amid a backdrop of slowing – or even evaporating – earnings.

~ Addison

P.S. Exuberance for AI has forced a massive concentration in a historically few stocks such as Nvidia. Fortunately, there are pockets of extreme value elsewhere in the market.

That includes materials, commodities, mining and energy stocks, as the Trump administration pushes for a stronger industrial policy and more domestic production.

If you have any questions for us about the market, send them our way now to: feedback@greyswanfraternity.com.

The stock market “rebalancing” is a polite way to put it. Energy and health care are getting a healthy boost. But tech hardware and software makers are still getting dressed down and have been asked to report to the principal’s office.

The great rotation underway has triggered a series of “Hindenburg Omens.” Five have occurred in recent weeks.

The S&P 500 has traded in a 3.7% range over the past two months — less than half the 20-year median of 8.6%. One of the tightest ranges in modern history.

In trader parlance, the indexes are “flat,” a setup that often materializes before a sell-off at the top after a multi-year bull market.

Goldman Sachs told its own traders to be aware that institutional trading activity resembles a VIX reading near 35. Rather than a reading of 20, where the VIX has been trading over that same 2-month period.

The U.S. software ETF, IGV, tested its April 2025 lows last week and trades roughly 35% below its peak. The “SaaS-pocalypse” in software companies reflects the fear of Citrini’s 2028 scenario happening in real time. That divergence now exceeds the spread seen at the peak of the Great Financial Crisis.

Under the surface, the “great rotation” we wrote about last week is threatening to widen.

Despite its overly-educated 40-million-plus population, on a GDP per capita basis Canada is null. Collectively, the Great White North would rank as America’s second-lowest state, coming in above Mississippi, but below Alabama.

SpaceX is the most valuable private startup in history — and if its success continues, it might become the most valuable public company in history.

After all, as Musk famously said in 2023, “I have never lost money for those who invest in me and I am not starting now.”

For investors, SpaceX has been a wild, joyful ride — and now the journey continues!