Is The Stock Market In Bubble Territory?

Motley Fool Money

The Motley Fool

Business, Investing

4.4 • 3K Ratings

🗓️ 16 July 2025

⏱️ 17 minutes

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Summary

Valuations are stretched, but is it a bubble. And we discuss the latest AI and energy news, ASML’s earnings, and a surprising report from Johnson & Johnson. (00:21) Travis Hoium, Lou Whiteman, and Rachel Warren discuss: - Is the market in a bubble? - Google’s $25 billion data center and energy deals - Earnings takeaways from ASML and J&J - Bold predictions this earnings season Companies discussed: Brookfield Asset Management (BAM), Brookfield Renewable Partners (BEP), Johnson & Johnson (JNJ), Alphabet (GOOG, GOOGL), ASML (ASML), Palantir (PLTR), Robinhood (HOOD), Cloudflare (NET) Host: Travis Hoium Guests: Lou Whiteman, Rachel Warren Engineers: Dan Boyd, Natasha Hall Advertisements are sponsored content and provided for informational purposes only. The Motley Fool and its affiliates (collectively, "TMF") do not endorse, recommend, or verify the accuracy or completeness of the statements made within advertisements. TMF is not involved in the offer, sale, or solicitation of any securities advertised herein and makes no representations regarding the suitability, or risks associated with any investment opportunity presented. Investors should conduct their own due diligence and consult with legal, tax, and financial advisors before making any investment decisions. TMF assumes no responsibility for any losses or damages arising from this advertisement. Learn more about your ad choices. Visit megaphone.fm/adchoices

Transcript

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0:00.0	Is a market bubble farming right under our noses?
0:08.6	Motley Fool Money starts out.
0:20.7	I'm Travis Hoym, joined by longtime fools, Lou the legend, Whiteman, and from an undisclosed
0:26.1	location somewhere in Europe, Rachel Warren. Today, we're going to get to ASML and Johnson &
0:31.5	Johnson's earnings results, which came in overnight. Google's $25 billion energy deal, but first,
0:37.4	are we in a market bubble? Lou,
0:39.8	I remember Cloudflare trading for 100 times sales at the peak of the market in 2021.
0:44.6	The stock then fell 80% in six months. Today, Palantir is trading for 110 times sales. The stock is
0:50.7	over $150 per share. Robin Hood, 25 times sales at $100 per share. It looks like a
0:58.4	bubble. It feels a little like a bubble. Are we in a bubble? Look, Travis, there's always a bubble
1:04.0	somewhere, right? And yeah, valuations, they look stretched. My go-to stat here is the S&P 500 is
1:10.4	currently trading at 25 times earnings. That's
1:13.4	well above the 20-year average, about 16 times earnings. So yeah, that's frothy. And I do think you need
1:20.5	to keep that in mind. For example, I think Hidden Gems just sold down some of its position in ERISA networks
1:26.0	based on high valuation. So you keep that in
1:28.2	mind. But here's the thing. Markets can remain at high valuations for a long time. So I'm not
1:33.9	running for the exits. I'm being selective. I'm looking for opportunities out there in areas
1:38.3	like financial services and income stocks. So I'm keeping it in mind. I'm adjusting as we go,
1:42.9	but I also want to stay in the market. You know, I don't think I would say that we are in a stock market bubble, but I do think it's an important point to discuss. I mean, right, we're looking at valuations of a lot of tech companies right now, in particular. I think it's easy to be concerned that there might be a bubble forming. We've heard a lot of analysts make comparisons
2:00.9	to the dot-com boom, of course. There's a lot of excitement that we're seeing in the tech
2:05.2	space in particular right now. This is being really driven by the AI revolution, whether it's
2:09.8	data center companies, chip companies, software-based platforms like Palantir, as you mentioned,
	...

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