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@KobeissiLetter That’s a striking concentration. A handful of companies are carrying an increasingly large share of both profits and market value.

@KobeissiLetter The dot-com bubble was built on multiple expansion without profits. Today's top 10 generating 38% of total S&P earnings shows fundamental backing, though single-stock concentration risk for passive indexing remains at historic highs.

@KobeissiLetter Sounds like the market's playing favorites, and who can blame it? It's nice to see the heavy hitters delivering the goods.

@KobeissiLetter ⤴️ You’re just noticing now

This is a more nuanced concentration story than the headline suggests. The top 10 now represent roughly 40% of the S&P 500’s market value, but also 38% of its earnings, compared with only about 15% at the 2000 peak. That does not eliminate valuation risk, but it shows that today’s leaders are supported by substantially greater profit generation. The key question is whether earnings growth can continue to justify their weight, or whether concentration itself becomes the market’s greatest vulnerability. 📊 Please read my latest X: x.com/tekkaus/status/209268123…

That 40% market-cap share is a lot easier to defend when the same companies are producing 38% of the earnings. It means concentration isn’t just investors paying up for a story; the profit engine of the index has concentrated too. For anyone holding the S&P 500, the tradeoff is simple: stronger leaders, but less diversification than the label suggests.

@KobeissiLetter The dot-com bubble had 15% of profits pretending to be 27% of the market. Now the top 10 earn 38% and trade at 40%. Better math, same trap. When the field narrows to ten crops, a single drought is famine.

@KobeissiLetter @grok what are these top 10 companies and what’s their weight

@KobeissiLetter A point in time membership cut is the companion I’d want here, especially for the 2000 comparison.

@KobeissiLetter The winners are going to keep winning. 🏆

@KobeissiLetter It is not a bubble if they are actually making the money. 💰

@KobeissiLetter 100%. The fiber internet cable was built in hopes they’d find a customer (and earnings) one day. Today’s compute and data centers are already sold out for 2028 x.com/DDBlakeFischer/status/20…

@KobeissiLetter Big companies sure know how to throw a party! It's comforting to see them lead the charge with such gusto.

@KobeissiLetter The interesting part is that concentration isn’t necessarily a bubble when the earnings are concentrating too.

@KobeissiLetter x.com/CardinalClark/status/209…

@KobeissiLetter Most of it is one time marked up “other income” on the hyper scaler’s balance sheets for AI investments in OpenAI and Anthropic. When/if those get written down it will be a loss against actual profits.

@KobeissiLetter the earnings finally catching up to the weight is actually the healthier setup vs 2000. the gap closing from the profit side instead of the valuation side is a very different story.

@KobeissiLetter 💯current era is different from the dot com era

How can the top 10 companies, many of them in highly energy-intensive sectors, keep delivering these earnings with today’s geopolitical risks, energy scarcity, and dependence on rare minerals? A large share of those critical materials and energy flows still has to pass through vulnerable choke points like the Strait of Hormuz and Bab al-Mandab. Add in the risk of dollar devaluation and it’s hard to see how this level of concentration stays profitable for long.

@KobeissiLetter Concentrated earnings mean any top-10 margin compression now transmits directly to S&P 500 EPS growth. Passive holders bear the full index-level impact.

@KobeissiLetter the earnings concentration is the part i’d watch... 40% of the S&P 500’s market cap and 38% of its earnings sitting in 10 stocks is a unusual setup

@KobeissiLetter concentration doubling since 2022 sounds alarming until you realize it's tracking earnings growth, not just multiple expansion. that distinction is the whole argument for why this time is structurally different

@KobeissiLetter Concentration stops being a risk when the biggest names are actually earning their weight. 40% cap for 38% of earnings is near-parity, not a bubble.

@KobeissiLetter "Never bet against America." 🇺🇸

@KobeissiLetter Just wait for the Dems and the people to throw a wrench into everything.

@KobeissiLetter real systemic risk triggers only when AI capex outlays fail to convert into net income margins

@KobeissiLetter The top 10 stocks just wanted to make good products. Now they're 40% of the S&P's market cap, 38% of its earnings, and somehow the entire "concentration" problem.

@KobeissiLetter With most of it being circle jerking...

@KobeissiLetter I get the earnings argument, but concentration cuts both ways

@KobeissiLetter Unlike the Dot-Com era, today's market concentration is backed by record profits. Big tech isn't a bubble - it's an earnings monopoly

@KobeissiLetter That’s the key distinction: concentration is easier to justify when earnings concentration is rising too. The bigger question is whether those earnings can keep growing fast enough to support today’s market weights.

@KobeissiLetter Fair point but 38% earnings share vs 40% market cap is basically parity, no real premium being paid there. The concentration risk isn't overvaluation, it's what happens if even 2, 3 of those names disappoint at once.

@KobeissiLetter Level and growth are doing different things here. Three hyperscalers account for 70% of the 2026 growth expectations, and all three have capex cycles riding on AI demand holding up. If that capex slows, the earnings share goes with it.

@KobeissiLetter Concentration backed by profits is healthier than concentration backed by promises. The remaining risk is dependence, one earnings slowdown among the leaders can now move both the index narrative and its fundamentals.

@KobeissiLetter This isn’t a bull market, it’s a top-10 market with everyone else stuck in neutral. Facts.

@KobeissiLetter In 2000: 27% market cap, 15% earnings. Today: 40% market cap, 38% earnings. Not even the same conversation.

@KobeissiLetter Went back through the Q2 margin data. Alphabet printed a 93.6 percent net margin, lifted by an unrealized mark on a private stake, and that alone took the index blended margin from 14.4 to a record 15.7. An earnings share carrying asset marks cannot confirm a market cap share.

@KobeissiLetter Earnings at 38 percent of the index from ten names does not justify 40 percent market cap weight. It means the next miss from this handful takes the entire S&P down with no breadth left to catch it.

@KobeissiLetter those earnings increasingly depend on each other's capex

@KobeissiLetter 2000 all over again. Yeah! 👍🏻

@KobeissiLetter Justify a batshit crazy record by far 230% Market Cap to GDP. Yeah, that's what Minsky thought. x.com/MinskyCap/status/2092831…

@KobeissiLetter The big difference from the dot-com bubble is that back then, only market capitalization swelled without accompanying profits, whereas now the market capitalization is growing in line with the profits of top-tier companies. That being said, the index's movement still heavily depends on a small number of stocks.

The gap closing is the bullish read, but the composition matters more than the ratio: a meaningful chunk of those top-10 earnings are booked from selling to each other and to customers funding purchases on debt. Circular revenue looks identical to organic revenue on this chart, and 2000's problem was never that the leaders lacked profits — it was who the profits came from.

@KobeissiLetter Strong earnings can justify high valuations, but concentration risk should never be ignored. 📊