U.S. and Canadian investors now hold nearly 60% of their financial assets in stocks — a level that exceeds peaks seen before the bear markets of 2000, 2007, and 2021, according to The Kobeissi Letter. The near-record allocation underscores a growing bet on equities at a time when market gains have become increasingly dependent on a narrow set of AI stocks.
Equity allocation by the numbers
The Kobeissi Letter’s analysis shows that Scandinavian investors hold about 50% in equities, European investors around 31%, and Japanese investors roughly 20%. North American investors are far and away the most exposed, a tilt that historically has preceded sharp downturns. The current 60% figure stands above the peaks that marked the dot-com bust and the 2008 financial crisis.
AI stocks dominate the S&P 500
Since late February, the S&P 500 has gained 8.03%. Strip out AI stocks, however, and that gain shrinks to just 1.04%. At its recent peak, the AI sector accounted for 49% of the S&P 500 — the highest concentration on a single theme since railroad stocks dominated the index in the late 19th century. That concentration makes the broader market vulnerable to any stumble in AI companies.
June’s sharp drop and the non-AI rally
Between June 2 and June 10, the S&P 500 fell about 4.5%. Yet the non-AI portion of the index actually rose during that period. The divergence suggests that while AI stocks pulled the overall market down, other sectors showed resilience. Still, the heavy weighting of AI means its swings dictate the index’s direction.
More AI names are coming
SpaceX was listed in June, and Anthropic and OpenAI are expected to follow later this year. Those additions will further concentrate the S&P 500 around AI-related companies. With more AI listings on the horizon, the index’s exposure to the sector will only deepen, raising the stakes for a market already stretched to historic levels.
Whether the S&P 500 can maintain its upward trajectory without a broader base of support — or whether the record equity allocation and AI dominance will trigger the kind of correction seen at previous peaks — remains the open question for investors watching the second half of 2025.
