SMCI Drops 3% as U.S. Stock Valuation Flirts With a 155-Year Record

As of 3:00 p.m. ET on July 13, Super Micro Computer (SMCI) was trading at $27.36, down 3.36% from the prior close of $28.31. It opened at $27.73, reached an intraday high of $28.2499 and a low of $27.30. At the same time, debate is heating up over whether U.S. stock valuations are approaching an all-time extreme. According to The Motley Fool, the S&P 500’s CAPE Ratio had climbed to 42.84 by early June, within roughly 3.5% of the all-time high of 44.19 set during the dot-com bubble in December 1999.^{[The Motley Fool]}

CAPE Ratio Nears a 155-Year Record

The CAPE Ratio, developed by Nobel laureate Robert Shiller, uses inflation-adjusted average earnings over the past 10 years rather than just the trailing 12 months. This makes it a more stable benchmark for comparing market valuations across different economic cycles.^{[The Motley Fool]}

According to The Motley Fool, the CAPE Ratio’s historical average since 1871 is roughly 17.4. In early June, as the S&P 500 and Nasdaq Composite both closed at record highs, the ratio hit 42.84 — not only the peak of the current bull market but nearly matching the 44.19 record from December 1999. A June 1 tweet from Barchart noted: “The CAPE Ratio is now just 3.5% away from surpassing the dot-com bubble to become the most expensive stock market valuation in history.”^{[The Motley Fool]}

Historical Warning: What Happens After Extreme Valuations

The Motley Fool notes that while an extremely high CAPE Ratio can’t predict exactly when or why markets will turn, it has accurately foreshadowed major U.S. stock declines many times over the past 150-plus years. Since 1871, including the current instance, the CAPE Ratio has exceeded 30 only six times. The prior five — including August-September 1929 (on the eve of the Great Depression) and 1997-2000 (the dot-com bubble) — were each followed by at least a 20% drop in the S&P 500, Dow Jones Industrial Average, or Nasdaq Composite.^{[The Motley Fool]}

The report also flags several potential headwinds: rapidly rising margin debt, inflation hitting a three-year high in May, and interest rate uncertainty. But it argues that stock valuations themselves may be one of the most telling indicators.^{[The Motley Fool]}

Market Divergence: Opportunity in Neglected Sectors

Even as the overall market looks pricey, not all sectors have rallied in lockstep. On CNBC’s “ETF Edge,” ETF Action co-founder Mike Akins advised investors to focus on areas that underperformed the big AI names in the first half. He sees strong growth potential in overlooked sectors like software and cloud in the second half.^[CNBC]

Akins said his watchlist includes sectors that lagged in the first half and could provide a boost to portfolios in the second half. That view contrasts with the market’s heavy concentration in AI stocks — a rally fueled since 2025 by the AI boom and record S&P 500 share buybacks.^{[The Motley Fool]}

Other Market Moves

In individual stocks, Cipher Mining (CIFR) fell 7.3% on insider selling.^[MarketBeat] SpaceX (SPCX) also saw recent volatility. Per CNN, SPCX closed the most recent session at $145.30, down 4.51% on the day, with a modest after-hours gain of $0.62. The company’s market cap stands at roughly $1.93 trillion, placing it in mega-cap territory.^[CNN] One analyst issued a Street-high price target of $800 per share on July 10.^[CNN]

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