Goldman Sachs Partner: Market Shifts into Greed Mode as Risks Accumulate Beneath the Boom
Claire Weston
Goldman Sachs partner Bobby Molavi warns that the S&P 500's nine-week winning streak and 57% rally from April lows is driven by flows and sentiment, not fundamentals — leaving no cushion if the mood turns.
How extreme is this rally?
The S&P 500 has closed higher for 9 consecutive weeks, on track for a 10-week record. May alone produced 11 all-time highs, and June keeps adding more.
Single stocks are wilder: Arm doubled in 10 trading days, Intel rose 180% in six months, SanDisk is up 600% year-to-date.
The rally is global: South Korea's KOSPI is up 108% YTD, SK Hynix has gained over 1,000% in 12 months. Goldman has raised its KOSPI target to 12,000 — roughly 50% above current levels.
What is actually driving prices — fundamentals or sentiment?
Molavi is blunt: the drivers are flows, positioning, sentiment, and momentum — not fundamentals or valuations.
This means → the rally has no earnings or valuation "floor." If sentiment flips, there is nothing underneath to slow the fall.
In plain terms = prices aren't rising because companies earn more — they're rising because everyone is chasing the move. The problem: once someone heads for the exit, everyone tries to leave at once.
How fast is AI creating wealth?
Jensen Huang's net worth surged from $10.9 billion in October 2022 to $177 billion. All seven Anthropic co-founders are now billionaires; the Amodei siblings are worth close to $10 billion.
South Korea's redistribution is even more concrete: Samsung + SK Hynix now have a combined market cap above $2 trillion, exceeding South Korea's GDP ($1.92 trillion). Their combined profit in Q1 alone hit $39 billion.
This reflects an extreme concentration of AI wealth — the 19 new AI billionaires minted in 2026 are collectively worth about $60 billion, most of it created in just two years.
How frenzied is the IPO market?
SpaceX's IPO could reach $75 billion, more than doubling Saudi Aramco's $29 billion record.
OpenAI and Anthropic have both filed confidentially to go public. Alphabet completed an $80 billion equity raise and its stock fell only 3.7% that day — the market barely flinched at that scale of dilution.
This means → the market is pricing "the AI story" at peak optimism — the bigger the raise, the more it gets chased.
What cracks are hiding beneath the boom?
Corporate buybacks are weakening — a long-running pillar of equity support is fading. Momentum is dominating: strategies crowd into the same direction, and last Friday a TMT momentum long-short basket dropped 10% in a single day, exposing stampede risk.
Retail participation is at record levels: leveraged ETFs, zero-day options (0DTE — options expiring the same day they're traded), and auto-callable structured products have "gamified" markets to an unprecedented degree.
AI capex payback remains unclear — companies are burning compute and tokens at enormous scale, costs are surging, but when the returns show up and who foots the bill has no clear answer.
If this is a bubble, how does it end?
The top 10 S&P 500 companies now account for roughly 41% of total market cap. A "K-shaped market" is forming — the leaders grow bigger, everyone else falls further behind.
Energy and commodities make up just 6% of S&P market cap, yet AI data centers demand massive power and physical resources. The Quantix commodity index is up 217% since 2020, versus 130% for the Nasdaq and 85% for the S&P — hard assets may be undervalued by public markets.
Molavi offers no call on when this ends, but his framework is clear: even if this proves to be a bubble, it is an "earnings-driven bubble," not a "multiple-driven bubble." In plain terms = the first is a car speeding with fuel still in the tank; the second is speeding on empty — how it ends, and how fast, are completely different.
Content is for reference only, not financial advice.