Wall Street’s artificial intelligence (AI)-driven bull market recently completed its fourth anniversary. AI is creating a multitrillion-dollar global business opportunity by helping software and computer systems make decisions on their own. The boom has helped several technology companies reach trillion-dollar valuations and pushed the Dow Jones Industrial Average, S&P 500 and Nasdaq Composite to record highs.
However, the stock market may not be as healthy as its major indexes suggest. Although the main indexes are trading near record levels, a large number of individual stocks have fallen significantly from their own peaks. Historical patterns suggest that the market could be approaching a turning point because a small group of companies is driving much of its growth, according to The Motley Fool.
S&P 500 stocks fall below record highs
On October 5, the S&P 500 reached a record closing high of approximately 7,819 points. The index has benefited from heavy investment in AI infrastructure, including the technology and systems needed to develop and run AI services. Better-than-expected corporate earnings have also helped push the broader stock market higher.
Despite the S&P 500 trading close to its record high, 84% of its 503 components were at least 10% below their individual record highs as of October 13, 2026, according to The Motley Fool. The index has 503 components rather than 500 because three companies have two classes of shares. This means that while the overall index is near its peak, most of its constituent stocks have fallen at least 10% from their own highest prices.
{{/usCountry}}Despite the S&P 500 trading close to its record high, 84% of its 503 components were at least 10% below their individual record highs as of October 13, 2026, according to The Motley Fool. The index has 503 components rather than 500 because three companies have two classes of shares. This means that while the overall index is near its peak, most of its constituent stocks have fallen at least 10% from their own highest prices.
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S&P 500 crash risk grows across sectors
The weakness is particularly widespread in several sectors. More than 90% of S&P 500 stocks in each of these five sectors were trading at least 10% below their record highs: consumer staples, consumer discretionary, utilities, materials and real estate. These figures show that the strength of the main index does not reflect the performance of most stocks across these sectors.
Another sign of the market's uneven performance is the growing gap between the S&P 500 and the Invesco S&P 500 Equal Weight ETF. The S&P 500 gives more importance to companies with larger market values, meaning the biggest companies have a greater influence on its performance. In contrast, the equal-weight ETF gives a similar weight to each of its components, regardless of company size.
AI stock market boom raises concerns
This difference suggests that a relatively small number of large companies are doing much of the work in pushing the broader market higher. Several AI-related businesses have helped lift the Dow, S&P 500 and Nasdaq to record levels, even as many other stocks remain well below their peaks. The Motley Fool notes that history suggests this kind of market performance, driven by a small group of companies, may not be sustainable.
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Historical data from Bank of America's Global Investment Strategy shows that earlier investment booms also led to high levels of concentration in the US stock market. Around the start of the 20th century, railroads accounted for 63% of the US stock market. In the early 1970s, the so-called Nifty Fifty stocks made up 40% of the S&P 500. These examples show how a popular investment trend can dominate the market for a period.
S&P 500 record highs echo the 2000 crash
A similar pattern emerged during the dot-com boom. In early 2000, technology and telecommunications companies accounted for 41% of the S&P 500. However, the dot-com bubble burst in March 2000, triggering a major stock market decline. The S&P 500 subsequently fell 49%, while the Nasdaq Composite plunged 78%. These losses illustrate the damage that can follow when a heavily concentrated investment boom collapses.
The current AI boom has also produced a high level of concentration. The 10 largest AI stocks now account for 40% of the S&P 500, while AI-related stocks collectively reached 45% of the index in April 2026. According to the historical comparisons cited by The Motley Fool, the railroad, Nifty Fifty, and technology and telecommunications concentration booms eventually ended in major market downturns, as cited by Bank of America's Global Investment Strategy.
These historical comparisons do not establish exactly when the current AI-driven rally might end. However, they highlight the risks of a market that increasingly depends on a small number of companies. If one or more of the biggest AI businesses reports disappointing results, faces weaker demand or encounters other problems, it could put pressure on the broader market.
The central concern is that the S&P 500's record levels may hide weakness across much of the market. With 84% of its components at least 10% below their individual record highs and the largest AI stocks accounting for a substantial share of the index, investors could face greater risks if the companies driving the rally lose momentum, as noted by The Motley Fool.