Has A.I. Mania Created Twin Bubbles In Both Stock Prices AND Earnings? | New Harbor Financial

June 4, 2026

AI Summary

5 min read

“We very much think we have valuation and an earnings bubble,” says New Harbor Financial’s John Laudre. “Doesn’t mean these aren’t real. They’re not transformative, just like the internet was. But we’ve gotten way ahead of ourselves.”

On the latest monthly deep dive with the New Harbor team, Adam Taggart, John Laudre, and Mike Preston unpack a market that has become simultaneously euphoric and fragile. The S&P 500 has ripped higher, but the advance is almost entirely powered by two sectors: technology (specifically semiconductors) and energy. The semiconductor ETF SMH roughly doubled in a matter of months, a vertical move that historically does not resolve by going sideways. Meanwhile, financials, healthcare, and most other sectors have been laggards. The narrowness is a warning sign—major market tops often begin to “fall apart from within,” with participation shrinking even as headline indices hit new highs.

A Market That Refuses to Cooperate with History

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What you'll learn

1 (01:50) **Market Overview & The Challenge of Extreme Valuations** - Mike Preston introduces the current market environment, noting the conflict in Iran and the narrow, straight-up market movement.
2 (06:55) **Warning Sign: Extreme Market Narrowness** - Mike highlights that the S&P 500's gains are driven almost entirely by Info Tech and Energy, with semiconductors leading a vertical move.
3 (11:05) **The "Blow-Off Top" Thesis** - Mike explains his long-held view that this cycle will end in a parabolic blow-off top, and that we may already be in it.
4 (18:02) **Extremity Indicators Are Poor Timing Tools** - John Laudre shows data on the S&P 500's 8-week winning streak and 17% rally, both in the 99th percentile historically.
5 (21:41) **The Twin Bubbles Thesis: AI Stock Prices AND AI Earnings** - John argues that both valuations and forward earnings estimates for AI stocks are inflated, creating a "twin bubble."
6 (26:19) **The Real Economy Mirror: AI Capex Spending** - Adam highlights that AI data center construction spending has outpaced government transportation spending for the first time, creating a "wall of money" in the economy.
7 (32:58) **How a Correction Could Unfold: Rotation vs. Reset** - John discusses the potential paths if the AI trade falters.

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Show Notes

With the rabid fervor with which any stock even vaguely related to A.I. is being bid up right now, the advisors at New Habor warn we may now have a twin bubble in both equity valuations AND corporate earnings.Which leads them to wonder: Is this the blow-off top?If so, how bad will the ensuing correction be?I discuss that with them in today's video, as well as how they are helping clients prepare prudently for positioning their portfolios to survive whatever may be headed our way.

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