Paying up for the boom

Backstory

In the late 1990s, internet companies were often valued on metrics that were not dollars. A study of internet stocks in 1998 and 1999 found that page views and unique visitors helped explain their prices, while net income did not. The crash in early 2000 wiped out long tails of companies. Every new bull market, that scar tissue asks the same question: is this a bubble again?

This cycle has dollars where that scare cycle had vanity metrics. Nvidia, which sells the chips inside AI data centers, reported $96.2 billion of revenue and $59.7 billion of net income for the quarter ended 26 Jul 2026. Anthropic's revenue run rate, a yearly pace projected from current sales, topped $65 billion by the end of July, according to Reuters. Products are in market. Customers pay. Euphoria can still price a real market too high. The clock is when that repricing comes, not whether the revenue is real.

On 9 Sep 2026 this page argued that late private rounds at 50 to 100 times revenue look like late dot-com checks: a proven operator can defend a high multiple, a high price for each dollar of revenue, and a thin wrapper cannot keep one forever. Delaying a raise to wait for a higher price risks a closed window.

Where we stand

Numbers as of 27 Oct 2026.

The S&P 500 closed at 7,722.60 on 27 Oct 2026, up from 7,676.77 on 26 Oct. It is 1.2% below the peak of 7,818.93 on 6 Oct. That leaves 8.8 points to a correction, a 10% drop from the peak. The low in that window was 6,343.72 on 30 Mar.

The ten largest holdings in SPY, the main S&P 500 exchange-traded fund, made up 39.46% of the fund on 26 Oct.

Today the boom shows no price strain. The index is 1.2% under the peak, short of the 5% tripwire.

What we're watching

• A close below 7,037.04, which would be a 10% drop from the peak of 7,818.93 and a correction.
• A close below 6,255.14, which would be a 20% drop from that peak and a bear market.
• The top-ten share of SPY moving away from 39.46%, the latest reading.
• When private companies with thin wrappers, products built on someone else's model, try to raise at high multiples of revenue.
• Whether listed leaders keep reporting revenue and profit that can defend the price investors pay.