Market concentration around artificial intelligence stocks is beginning to resemble the final stages of the dot-com era, although that may point to further upside rather than an immediate market peak, according to KB Securities.
In a note to clients, analyst Euntaek Lee said current trading patterns are “largely the same” as those seen in 1999, when investor attention became heavily focused on internet-related companies while other sectors delivering strong earnings growth were largely overlooked.
Lee noted that a similar trend has emerged this year. Financial and healthcare stocks benefited from solid earnings drivers during 2025, yet “have been left out of the rally simply because they are not AI plays.”
According to KB Securities, investor behavior within the AI sector also mirrors what occurred during the technology boom of the late 1990s. At that time, companies often saw their share prices jump simply by announcing internet-related initiatives, regardless of whether those plans generated meaningful profits.
Lee argued that the same phenomenon can be seen in today’s market, highlighting stocks “skyrocketing on news of a visit by Jensen Huang, or a hint of forays into AI/robotics, despite the absence of related earnings.”
While narrowing market leadership is often viewed as a warning sign, Lee suggested investors should be cautious about drawing that conclusion too quickly.
“History shows that, in many cases, rising concentration indicates that the market still has momentum,” he wrote.
At the same time, he acknowledged that there are risks associated with a market driven by an increasingly small group of stocks.
According to Lee, “rally broadening is not necessarily healthy” and “may be a sign that the rally is approaching its end.”
KB Securities believes market leadership could become even more concentrated in the months ahead, reflecting patterns typically seen during the later stages of major speculative market cycles.