A leading Wall Street strategist is doing some calculations about the total value of U.S. stocks rocketing to a staggering 363% of GDP as of last Friday, blowing past the infamous 212% mark reached during the dotcom bubble. It’s a warning if you think it’s unsustainable, but David Kelly, chief global strategist for JP Morgan Asset Management, notes that the bull market is truly epic, “stretching, with some interruptions, all the way back to the 1980s.”
Kelly offered his own calculation in a Monday analyst note, “Checking the Foundations of a Roaring Bull Market.” Until the start of this epic, multi-decade rally, the value of all U.S. equities had averaged 72% of GDP between the third quarter of 1955 and the third quarter of 1985. What has transpired since has been remarkable, Kelly writes, and “the biggest part of market gains have not come from economic growth but rather from a rising profit share of GDP and higher P/E multiples.” Kelly adds that the “scaffolding supporting this roaring bull market” is “increasingly lofty”—and possibly unsustainable.
Data center investments have soared—so much so that their contribution to GDP growth in early 2025 has matched that of all consumer spending, raising concerns that companies are overcommitting to a trend that may not deliver near-term profits. AI unicorn valuations have ballooned to $2.7 trillion, but with limited industrywide revenue and profits, raising worries about whether the boom is sustainable.
For ordinary investors, this means a very costly catch: stock prices are high because they’ve bid up the same dollar of corporate profit to levels seen only in the wildest days of the dotcom or pandemic run-ups. As the bull market floats higher and higher above underlying economic growth, seasoned strategists recommend preparing portfolios for turbulence by diversifying beyond U.S. mega-caps, increasing exposure to international stocks, core fixed income, and alternatives.
For this story, Fortune used generative AI to help with an initial draft. An editor verified the accuracy of the information before publishing.
