So many people are talking about an equity bubble.

So many people are talking about an equity bubble. I am not sure what they are talking about.

This chart shows that the forward P/E for the SP 500 has remained virtually unchanged, hovering around 21 to 21.5 X for nearly two years. In 2025, the entire stock market boom has been driven by booming corporate profits, with the P/E ratio going nowhere.

For any equity market to qualify as a bubble, you need massive multiple expansion to levels that cannot be justified by any reasonable earnings assumption. That is not the case today. Not even close.