Studying price-to-earnings multiples on companies amid the Great Stock Price Boom of 2026 is so yesterday. We all know the multiples on most companies are well above their historical norms and prior market peaks.
If you are looking for another indicator that the stock market is smack in the middle of a bubble, Yahoo Finance is here to help by way of a new chart.
Goldman Sachs strategist Ben Snider did a deep dive into the enterprise value-to-sales (EV/sales) ratios being afforded to companies right now and compared them with historical norms. At the basic level, the EV/sales ratio measures how much an investor is willing to pay to own a piece of a company’s future sales.
Today, they are clearly super excited to pay a major premium, likely amid fear of missing out on the top-line impact from AI.
The dark blue line in the chart above from Snider, which tracks stocks with EV/sales ratios above 10x as a share of total US equity market cap, has just jumped to nearly 40%, a level that not only surpasses the dot-com bubble peak of roughly 35% in 2000 but absolutely obliterates it.
This makes it the most expensive valuation concentration in the history of the American stock market!
What is more concerning is the light blue line — stocks trading at EV/sales above 20x — which has surged to approximately 13% of total market cap. It’s a reading that also exceeds anything seen during the dot-com era, when that cohort briefly touched 15% before collapsing to essentially zero for nearly a decade.
The bottom line is that sales for companies better grow a TON in the coming quarters and years, or the belief investors have in that happening will be vaporized.
