Nasdaq valuations are outpacing money supply growth ๐ฎ
At the start of 2025, Nasdaq market cap hit 142% of M2 โ the highest ratio on record. The last time it came close was during the Dot Com bubble peak in early 2000.
๐ผ This spike has been driven almost entirely by a small group of AI-related mega-cap tech stocks. Broader participation remains weak.
M2 saw its first annual contraction since the Great Depression in 2023. It has started to recover, but the growth rate remains below long-term averages.
Without sustained M2 expansion, this level of market cap relative to liquidity is difficult to support. I'm not saying that the top is in for tech stocks but it's been so overheated only one time in history... ๐ฃ