US Tech Stock Divergence Hits Historic Levels, Nears Dot-Com Peak
The performance gap between the top and bottom quintiles of US tech stocks has reached ~120 percentage points over three months, the second-highest on record and approaching the 2000 Dot-Com peak of ~135 points. The spread has quadrupled in the past year.
The dispersion within US technology stocks has widened to levels not seen since the dot-com era. According to data cited by The Kobeissi Letter, the top 20% of US tech stocks have outperformed the bottom 20% by approximately 120 percentage points over the past three months. That is the second-highest reading in history, just shy of the ~135-point peak recorded during the 2000 Dot-Com Bubble.
The gap has more than quadrupled over the last year, accelerating faster than the 1999–2000 surge. The top-quintile tech stocks have returned +110% in the trailing three months, nearly matching the extreme levels of February 2000. Meanwhile, the bottom-quintile performers posted a negative return of -10%, underscoring the narrowness of the current rally.
The concentration of gains suggests that the tech rally is almost entirely driven by a small subset of names, leaving the majority of the sector lagging significantly.
Source: The Kobeissi Letter