The current technology sector is not in a speculative bubble analogous to 2000, as demonstrated by disciplined capital spending (less than 1x free cash flow) and earnings growth that has outpaced price appreciation.
The broader U.S. stock market is in the early stages of an earnings recovery after a multi-year contraction, suggesting potential for further upside.
Contrary to popular belief, periods of high uncertainty and modest Federal Reserve rate hikes have historically correlated with a higher probability of stock market advances.
The semiconductor industry shows signs of continued outperformance, supported by strong relative earnings growth and historical patterns showing a high probability of success when valuations are in their bottom quartile.
The macroeconomic environment is more benign than headline figures suggest, with core inflation (ex-shelter) at 2.3% and low unit labor costs providing a tailwind for corporate profit margins.
1990s
Describes this period as one where the earnings of the median technology stock peaked in 1996, years before the market's 2000 peak, and when high-beta tech stocks began a long-term downtrend relative to the broader sector.
Peak of 2000 Tech Bubble
Cites this period as an example of extreme overinvestment, where corporate America spent 3.5 to 4 times its free cash flow on CapEx.
Last 20 Years
Notes that over this period, the aggregate technology sector has demonstrated financial discipline by consistently growing its free cash flow above its CapEx.
Last 3 Years
Characterizes this timeframe as one of contraction for equal-weighted S&P 500 earnings, with a duration comparable to past recessions.
Recent Months
Identifies the start of a new cycle, claiming the earnings recovery for the equal-weighted S&P 500 began approximately four months ago and that the ISM new orders index recently inflected higher for the first time in three years.
Present Day
Assesses the current environment as having disciplined corporate CapEx (under 1x free cash flow), low unit labor costs, and a core inflation rate (ex-shelter) of 2.3%, all of which she interprets as favorable.
▶Contrarian Historical AnalysisJun 2026
Chisholm frequently uses historical data to challenge common market narratives, such as the belief that high uncertainty is bearish or that strong past performance precludes future gains. She quantifies historical probabilities to argue that periods of modest Fed rate hikes, high uncertainty, and strong industry momentum have often preceded further market advances.
This approach suggests investors should be wary of consensus views and instead focus on statistical probabilities derived from long-term market behavior, potentially identifying opportunities where sentiment diverges from historical precedent.
▶Debunking the 'Tech Bubble 2.0' NarrativeJun 2026
She argues that the current technology sector is fundamentally different from the 1990s bubble, highlighting disciplined capital expenditure that remains below free cash flow, in stark contrast to the overspending of 2000. Furthermore, she points out that for semiconductors, earnings growth has actually outpaced the industry's significant price performance.
This theme indicates a focus on corporate financial health (CapEx vs. free cash flow) as a key differentiator between speculative bubbles and sustainable, earnings-driven growth phases.
▶The Broad Market Earnings RecoveryJun 2026
Chisholm identifies a nascent earnings recovery in the equal-weighted S&P 500, which she notes has just emerged from a contractionary period comparable in duration to past recessions. This recovery is supported by favorable unit labor costs, which she identifies as the strongest historical correlate to corporate profit margins.
Her focus on the 'other 493' stocks beyond the mega-caps suggests a belief in a broadening market rally and a potential leadership shift away from just a few dominant names.
▶Macroeconomic Undercurrents and Fed PolicyJun 2026
Chisholm analyzes macroeconomic indicators like inflation (ex-shelter), manufacturing orders (ISM), and capital goods orders to gauge the economic environment and predict Federal Reserve actions. She posits that the current inflation picture is more benign than headlines suggest and that the Fed's response to various shocks, like oil prices, is historically predictable and often less aggressive than feared.
Her analysis implies that a granular look at economic data, rather than headline numbers, is crucial for accurately forecasting monetary policy and its market impact.