Macro Markets and Machines_The Economic and Market Transformation Driven by AI_GWM report - Flipbook - Page 15
Macro, Markets, and Machines
November 2025
Exhibit 10 – Since 2023, U.S. Equity Market Returns Have Been Driven by a Small Subset of Companies
Index = 100 (2023-01-01)
500
400
300
200
100
0
2023
2024
S&P 500
Mag 7 (equal-weighted)
2025
Semiconductors
IT sector
Source: Bloomberg Finance LP; Scotia Wealth Management.
Valuations have also been a talking point, and they are undeniably rich, warranting a measure of caution. The AI
trade has pushed multiples for those key beneficiaries – the semiconductor names, the Mag 7 cohort, and the
broader IT sector – well above their long-term pre-pandemic averages. Still, these multiples remain well below
the extremes of the dotcom era when the IT sector’s multiple peaked at over 60x relative to forward earnings
(Exhibit 11).
Exhibit 11 – Multiples Are Elevated, but Less So than at the Peak of the Dotcom Era
Source: Bloomberg Finance LP; Scotia Wealth Management.
Scotia Wealth Management
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