Stocks keep climbing higher. That’s good news for investors, but as valuations stretch, it also means the risk of a market bubble forming are also getting higher.
The S&P 500 now trades at a price-to-earnings ratio of 28, well above its historical average, and other metrics like the CAPE ratio and the ratio of the S&P 500’s market cap to U.S. GDP are also elevated.
Plenty of stocks are vulnerable to a pullback, especially those that have boomed due to artificial intelligence fervor. But one stock that looks set to deliver no matter what happens is Netflix (NASDAQ: NFLX), the streaming giant.