Apple, Microsoft, Amazon, Google, and Facebook now make up 18 percent of the S&P 500's market cap, according to Goldman Sachs strategist David Kostin, raising concerns that it could create a "dot com bubble."
Microsoft, Cisco, General Electric, Intel, and ExxonMobil made up 18 percent of the S&P 500's market cap in 2000, Kostin noted, causing a sharp slow of economic growth.
"In order to avoid repeating the share price collapse experienced by their predecessors, today's market cap leaders will need to at least meet — and preferably exceed — current consensus growth expectations. This time, expectations seem more achievable based on recent results and management guidance," Kostin said.
Apple, Microsoft, Amazon, Google, and Facebook trade at a price-to-earnings ratio of 30 times, better than the 47 times traded by Microsoft, Cisco, General Electric, Intel, and ExxonMobil in 2000.