Technologies

Why Apple Is Content With the Blue Bubble Divide in iMessage

Apple’s iMessage continues to reserve encryption and other features for iPhones to the detriment of all mobile phone users.

Javed Uddin’s future was riding on a single emoji.

In 2016, Uddin, a small business owner in Houston, had been single for the past year. A friend introduced him to Maryam Baloch, an office manager and makeup artist in Chicago. The two began messaging.

However, the pair realized they were running into miscommunication problems. Uddin, using an Android-powered LG Nexus 5X, was receiving incorrect emojis from Maryam’s iPhone 6. This was likely due to phone manufacturers each using their own emoji designs, with different-looking emojis for the same expression.

Regardless of the cause, the blame fell on Uddin for not having an iPhone, where his messages would come in via green bubbles. This was because in 2011 Apple introduced iMessage, an instant messaging service that allows for richer forms of communication than plain old SMS. When two iPhones communicate with one another, it comes in via blue bubbles, includes typing indicators and has since grown to include sharing media, games and even money. At the time it was a rival to BlackBerry’s similar BBM messenger, and grew as Apple’s iPhone gained popularity.

Twelve years later, the differentiating green bubbles persist.

The messaging situation between Uddin and Baloch got so bad that she began screenshotting emojis to ensure feelings she conveyed were coming through correctly. This prompted Uddin to switch to an iPhone as quickly as he could.

“In order for things to land — in order for me to make a good impression — I really need to make sure my texting game is on point,” said Uddin. “Like, I really, really wanted this to work.”

Apple’s messaging divide is affecting how people interact. Not only that, text communications between iPhone and Android devices become a subpar experience, with both users being downgraded to SMS, a much older texting protocol, losing features like in-line reactions, thread responses and text edits. Photos and videos also come in heavily compressed. While many other cross-platform texting apps like WhatsApp and Signal fill the gap, the standard texting app that ships on any phone is often the place where people text each other the most.

The fault of that out-of-date experience is often placed on Android users, although it’s an experience of Apple’s making. This blame can take the form of prejudgments about a person’s income, personality and overall social status, which can sometimes lead to bullying and added pressures to switch.

The mobile phone industry is quickly switching from SMS to RCS, an upgraded messaging standard that can support more modern features like those seen in iMessage and other contemporary texting apps. It’s estimated that nearly half the globe will be using RCS by 2026, according to a report from Juniper Research, as the texting standard is included on any Android phone that runs the Google Messages app. While it took years, all three US major carriers also have pledged to support the RCS standard.

But Apple refuses to support it. During the Code conference last year, CEO Tim Cook said iPhone users hadn’t been asking for RCS adoption and told a mildly disgruntled attendee to “Buy your mom an iPhone.”

Apple didn’t reply to requests for comment.

Excluding others feels good

As inconvenient as it is for iPhone users to have to deal with green bubbles in group chats, for Apple, exclusivity is part of the draw.

“We’re constantly creating insiders and outsiders using different cues,” said Jason Farman, a professor of American studies at the University of Maryland. In this case, it’s extending to the technology we use. “Creating us-them divides, that’s human nature.”

Before the Industrial Revolution, people didn’t care too much if a tool was new or old, as long as it worked, Farman said. After Ford released its Model T in 1908, it maintained the same general design and black color for nearly two decades of production. But General Motors began introducing annual revisions in the 1920s, with new colors and design tweaks as a means of differentiation and it changed how consumers viewed products beyond absolute utility and as something iterative.

“Whenever that car pulled up next to a Model T, or even the model year before that, instantly it marked old and new, and we began to assign value judgments to those,” Farman said.

Products soon became a way to communicate our personalities and values. Owning a Jeep, for example, can indicate to someone that you’re an adventurous, outdoorsy type. That relationship marked a major departure from how identities were defined in past generations.

“Our identity was pretty much given to us,” said Aaron Ahuvia, a professor of marketing at the University of Michigan-Dearborn. In the past, our identities were defined by the family we were born into, Ahuvia said. Our family’s religion and social class ultimately determined our career trajectory and marital prospects. In stark contrast, people today have more control over their identities.

“Everything is totally up for grabs,” said Ahuvia. “The good news is that it gives people a lot of freedom, and it’s really genuinely a good thing that people have the freedom to become the person they want to be. But the bad news is that you become obsessed with your identity and creating and forming it.”

Sociologists call this nonstop work to shape and present our identities the “project of the self.”

Products and brands are one of the easiest ways to do that, Ahuvia said, especially in a consumerist and capitalist culture. Considering that phones are central to communication, the type of phone we use has become fundamental to signaling who we are and what groups we belong to.

An American problem

Apple’s unwillingness to adopt RCS, which has bifurcated the messaging environment, is largely an American phenomenon. In other parts of the world, third-party messaging services are the standard over SMS.

WhatsApp, which doesn’t support SMS or RCS, is by far the world’s most popular third-party messaging service. With 2.8 billion monthly active users worldwide and 138 billion messages sent each day, its ubiquity and cross-platform compatibility make it an easy way to communicate and send secure messages to anyone.

But SMS texting is still considered the preferred way to communicate for Americans, with 2 trillion text messages sent in 2021, helping Apple maintain its hold over messaging in America. By making iMessage the default messaging service on iPhone, and by being unwilling to adopt RCS, Apple has forced Americans into a divided system.

Apple’s stance is anathema to how people tend to view the internet, as an open system where ideas can flow freely. According to a 2022 University of Maryland poll, 73% of Americans support net neutrality — the idea that everyone’s internet access should be equal and that some sites shouldn’t get priority over others.

“People expect an egalitarian environment, even if that’s never what the developers or the manufacturers or even the legislators have promised,” said André Brock, associate professor of literature, media and communications at Georgia Tech. “They believe that because they know the internet is a series of servers that can transmit messages without discrimination around the world, that their software and hardware experiences should be the same”

The wireless industry was trying to solve the SMS problem before iMessage fragmented messaging. RCS was first developed in 2007 and began deployment a few years later. Google announced it was building RCS support into Android in 2016, but it wasn’t until 2019 that it began widely rolling it out. It also took Google years to get the carriers onboard, and they almost attempted to make their own take on RCS messaging in 2019 — but that effort was abandoned in 2021 with the carriers instead supporting Google’s effort.

By contrast, iMessage had already launched in 2012, all but sealing BlackBerry Messenger’s fate. And given that it took years for RCS to fully deploy across multiple carriers, Apple was able to grow its service faster since it didn’t need to get other companies to sign on.

In September 2015, Google acquired Jibe Mobile, a company that built systems so that people on different wireless networks could communicate via RCS. Because building RCS infrastructure is expensive, Jibe offered carriers RCS as a service so carriers could embrace it more easily.

RCS is an open specification overseen by the GSMA, an industry group made up of network operators from around the world. Major players like Google, Apple, Samsung and other hardware makers often work closely with the GSMA.

Google has its own RCS servers, which AT&T uses. T-Mobile uses its own servers. So by no means is RCS Google-controlled, but it does supply encryption keys. Apple could integrate RCS into iMessage, using its own servers, but hasn’t made clear publicly what its exact concerns are, though it has expressed to Google that the search giant’s control of servers and its administration of ads via RCS is a barrier to adoption.

Last year, Google had to disable RCS ads in India due to spam from businesses.

“As a participant in the GSMA, Apple is able to bring up their concerns so that we can all work on resolving them together,” said Elmar Weber, Google’s senior director of engineering for Android and business communications and previously Jibe’s chief technology officer.

Although blue versus green bubbles is more of an American problem, it’s something that the Europeans might influence. The European Commission is investigating whether iMessage should be designated a “core” service as defined by the Digital Markets Act. That designation, which Google supports, would require Apple to make iMessage compatible with rival messaging services. Included in this designation is WhatsApp, in which the beta includes support for other texting options.

The cost of exclusion

Apple’s marketing exalts its commitment to security and to protecting privacy. Ads for its devices laud how the company keeps prying eyes away from your online activity. Tim Cook called privacy “one of the most essential battles of our time” and has promised that Apple will “stand up for encryption without backdoors — because we know that if you install a backdoor, anyone can use it.”

But Cook’s position toward privacy and encryption only includes Apple customers communicating with each other. As soon as an iPhone customer texts with an Android customer, the lack of RCS support means there’s no encryption protection.

“Apple not adopting RCS, like the rest of the mobile industry has, degrades the cross-platform messaging experience for everyone,” Weber said. “Adopting RCS means that everyone will get a better and more secure experience regardless of the operating system.”

While the chances of an adversary intercepting SMS messages between an iPhone and Android phone at a coffee shop are small, it’s still a significant risk. Using some inexpensive software, it’s also possible for hackers to intercept SMS messaging chains and break into devices, as demonstrated by Vice. It’s an issue Google pointed out with its latest Get The Message campaign, which calls out the wonky messaging situation between Android and iOS.

“There are certain entities that have the ability to read that information that [we’re] texting about. … Obviously law enforcement, has that ability,” said Gregg Smith, CEO of Technology Advancement Center (TAC), formerly Maryland Innovation Security Institute (MISI). “But it’s really not that difficult to use tools that are relatively easily available to intercept those types of communications.”

And RCS itself isn’t an end-all solution, either. It’s possible for a new standard to be developed with other entities that don’t involve Google so intimately.

Apple’s commitment to privacy isn’t absolute. Google pays Apple billions of dollars to be the default search engine on iPhones, iPads and its Safari web browser, facilitating a Google business that helps the search giant profile users and thereby target ads. Google’s payment for search traffic is central to the US government’s lawsuit that asserts Google illegally maintains a monopoly in online search and ads. Although you can change your default search engine, people seldom do. According to a 2020 Competition and Market Authority report, more than 99% of UK phone users have Google as their default search engine.

Socially, the green bubbles of iMessage can lead to bullying. That can disproportionately hit people who can’t afford expensive Apple devices, even with trade-in deals and refurbished iPhones lowering costs.

“A lot of kids actually get bullied for having Android phones,” Ahuvia said. After speaking with high school students for his research, Ahuvia found the iPhone and Android divide to be troubling, especially for those feeling excluded.

“They’re treated badly. It bothers them when they talk about it. Their emotion is so clear,” said Ahuvia. If he were in Apple’s position, he said, he’d stop practices that increase social torment among teens. “Apple is unfortunately making money off of that.”

The closest indication available of Apple segmenting messaging for profit is from released court filings during the Apple versus Epic Games trial a couple years ago. Craig Federighi, Apple’s senior vice president of software engineering, said, “IMessage on Android would simply serve to remove [an] obstacle to iPhone families giving their kids Android phones.”

Phones shouldn’t define us

Consumers are caught in a messaging divide that Apple could bridge. Deliberately or not, its use of green bubbles pressures people to align with Apple’s business interests without helping the wider population. Messaging bubbles are like Prada bags or Air Jordans, except that mobile phones are critical tools for communication and productivity in a our mobile-first world.

Although the internet’s free flow of information has helped connect us and boost business productivity, private companies have learned to profit from closed systems. Most popular social networks don’t interlink. You can’t join Zoom, Google Meet, Apple FaceTime or Microsoft Teams video conferences from other systems. Instant messaging platforms from two decades ago, like AOL Instant Messenger, Yahoo Messenger and MSN Messenger, never interoperated. Open systems like email and the web are in some ways the exception.

Our technology choices don’t define who we are. Stereotypes might suggest Android owners are more techies and iPhone owners are more fashion-forward. But it’s only one aspect of who we are and, ideally, shouldn’t dictate our friendships any more than whether our employers choose to use Slack or Microsoft Teams.

For Uddin and Baloch, being on iPhones helped their emoji communication breakdown. But both agree that it wouldn’t have prevented them from getting married. And Baloch told Uddin that buying an iPhone was excessive. That’s good news, because Uddin couldn’t keep his eyes off what was happening at team green when Google introduced its first Pixel phone.

“The jump was pretty exciting back into the Google ecosystem,” Uddin said. “So I was like, ‘Hey, I want to go back to Android,’ and, I mean, I already got the girl.”

Technologies

U.S. diesel price tops $6 per gallon, a record high as Ukraine and Iran wars ripple through economy

U.S. diesel prices hit their highest level ever as fuel supply disruption stemming from the Ukraine and Iran wars lifts transportation costs.

U.S. diesel prices hit $6 per gallon on Friday for the first time ever, as fuel supply disruptions triggered by the Ukraine and Iran wars raises transportation costs across the entire economy.

Truckers and farmers are paying about 63% more to fill up their semis and tractors than they did at this time last year, according to data from AAA. The average price nationwide is now about $6.06 per gallon.

Prices are even higher in California, the biggest agriculture state in the U.S., at $7.98 per gallon.

Fuel costs are rising as crude oil prices have surged in response to a sharp escalation in fighting between the U.S. and Iran this month. U.S. crude oil futures topped $100 per barrel on Thursday for the first time since May. The contract has gained about 20% in September.

Diesel is the real lifeblood of the economy even though consumers tend to pay more attention to retail gasoline prices, said Bob McNally, president of Rapidan Energy, in an interview with CNBC’s “The Exchange” on Tuesday.

Higher diesel prices are passed down to consumers in what they pay for food, consumer goods and energy. Diesel fuels the trucks, trains and ships that bring goods to market. It powers the machinery that farmers use to plant and harvest food. And it heats homes and generates electricity in some cases.

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“It’s the more insidious, more costly, and more impactful fuel,” McNally said. “As we climb higher, it is a real concern.”

Diesel prices at these levels will be a “silent killer” for the economy, said Patrick De Haan, head of petroleum analysis at GasBuddy, in an interview with CNBC’s “Power Lunch” Tuesday.

Gasoline prices, meanwhile, have never been this high this late in the year, De Haan said. Prices at the pump hit a Labor Day record of $4.15 per gallon earlier this week. Americans are spending about $700 million more per day on gas and diesel than they did a year ago, the analyst said.

“There’s sticker shock there for consumers,” De Haan said.

Fuel costs are rising as the Iran and Ukraine wars have disrupted global supplies. Kyiv has pounded Russian refineries, forcing Moscow to ban diesel exports. Iran and its militant Houthi allies in Yemen have also hit the refineries of U.S. Gulf allies. Fuel exports through the Strait of Hormuz are constrained due to the Iranian attacks on tankers.

The wars in Eastern Europe and the Middle East have shut down refineries with about 5 million barrels per day of capacity, said Valero Chief Operating Officer Gary Simmons on the U.S. refiner’s July 30 earnings call.

The world has lost nearly 8% of its diesel supply with little spare refining capacity available to make up the shortfall, said Andy Lipow, president of Lipow Oil Associates, in a Wednesday note.

Rising diesel prices pose an “enormous challenge” for the Trump administration, said Helima Croft, head of global commodity strategy at RBC Capital Markets, in a Sept. 4 interview with CNBC’s “Power Lunch.”

“U.S. refineries are running at 98% utilization rates — there is just no spare capacity,” Croft said.

Technologies

Buffett’s confidence in troubled decade-old acquisition finally pays off

Warren Buffett has said he paid too much for Precision Castparts in 2016. Now its complex metal castings are in high demand.

(This is the Warren Buffett Watch newsletter, news and analysis on all things Warren Buffett and Berkshire Hathaway. You can sign up here to receive it every Friday evening in your inbox.)

Buffett’s confidence in troubled decade-old acquisition finally pays off

Six years ago, when Berkshire Hathaway took an $11 billion write-down of its $37.2 billion 2016 acquisition of Precision Castparts, Warren Buffett wrote in his annual letter to shareholders he had paid “too much” for the company, which makes “complex metal components and products.”

While it was a “fine company – the best in its business,” he had been “simply too optimistic” about its profit potential, a “miscalculation … laid bare” by the enormous downturn for the aerospace industry, Precision Castparts’ largest customers, amid the Covid pandemic.

In a CNBC interview when the deal was first announced, Buffett admitted it was “a very high multiple for us to pay,” but told shareholders at the 2016 meeting he had great confidence in Mark Donegan, the company’s CEO, both then and now, and the company’s long-term profit outlook.

It’s taken longer than he planned, but Buffett’s purchase is now looking pretty good.

As Reuters puts it, there is currently a shortage of the “complex” products Precision Castparts makes that are essential for engine turbine blades.

They’re also used in natural gas turbines, which are in demand to produce energy for artificial intelligence data centers.

This week, GE Aerospace announced it would pay $11.75 billion to acquire Consolidated Precision Products, one of the few companies that competes against Precision Castparts.

Barron’s calls that “pricey” at 26 times projected 2027 earnings before interest, taxes, depreciation, and amortization.

Using the same multiple, Barron’s estimates Precision Castparts is worth around $100 billion. That’s well above the potential value of $60 billion to $75 billion it cited in an article last month that said the unit “probably has become one of the more valuable divisions” of Berkshire.

It’s also nearly three times the 2016 purchase price.

In the Barron’s piece, Andrew Bary said Berkshire, and its share price, aren’t “getting much credit” for the subsidiary’s rising value, in part because CEO Greg Abel, like Buffett, doesn’t do analyst conference calls or investor events that could draw attention to the unit’s performance.

His recommendation: “Without Warren Buffett at the helm, Berkshire may have to start telling its story if it wants to attract a new generation of investors. This year’s trading action suggests that something may need to change.”

Berkshire bounces a bit as Wall Street sells off

Berkshire Hathaway shares managed a modest gain this week even as Wall Street’s major averages declined, a small departure from the 2026 “trading action” Bary cites.

Both the Class A and Class B shares gained almost 0.9% while the S&P 500 fell by 0.8%.

Until Friday’s bounce, that benchmark index, along with the Dow Industrials and the Nasdaq Composite, had dropped four days in a row as oil and bond yields moved higher.

Even with this week’s outperformance, Berkshire’s B shares still trail the S&P 500 by more than 10 percentage points so far this year.

Nebraska candidate moves to replace ad that included Buffett’s image

The campaign team for the Republican running in Nebraska’s 2nd Congressional District accelerated the deployment of a new campaign ad after Susie Buffett complained about a previous commercial that briefly included an image of her father, Warren Buffett.

In the ad, a picture of Buffett and his name appear on screen for roughly two seconds as candidate Brinker Harding says, “Here in Omaha, we know a thing or two about the stock market, some more than others. But we do it without insider information.”

He then goes on to highlight his call for a ban on Congressional stock trading, saying some lawmakers “trade on secrets you’ll never know,” as they “get rich” while “we barely get by.”

In a report that led its 10 PM CT newscast Wednesday evening, ABC affiliate KETV in Omaha reported Susie Buffett had asked Harding on Sept. 2 to remove the ad.

She told the station, “I think it’s worth it to say that Warren did not give Brinker his permission to use his face or name in his ad.

“It implies that my dad endorses him. He did not have permission to use it.”

The KETV report quoted Harding as saying in a statement, “In Nebraska, we work hard and support each other, and we do it honestly. Warren Buffett exemplifies that, and that was the point of my ad.”

The report said Harding did not comment on whether the ad would be taken down but noted “it does look like new ads from his campaign are beginning to run on some stations.”

A Harding campaign spokesperson told me the campaign did not think its ad implied a Buffett endorsement, but to be respectful to the Buffett family, it responded to her concern by accelerating the rollout of its next planned ad by several days, although its effort was hampered by the Labor Day weekend.

The commercial now running does not show or mention Buffett.

BUFFETT & BERKSHIRE AROUND THE INTERNET

Some links may require a subscription:

– Best’s News and Research Service: 2026 Best’s Rankings: Berkshire Hathaway Takes DPW Top Spot Among Accident & Health Lines

– Financial Times: The day Warren Buffett saved Salomon Brothers

HIGHLIGHTS FROM CNBC’S BUFFETT ARCHIVE

The effects of 9/11 on Berkshire and the insurance industry (2002)

Warren Buffett shares his thoughts on the 9/11 attacks and explains how Berkshire’s insurance companies have started taking terrorism into account when writing policies.

AUDIENCE MEMBER: I know you lost a lot of money as a result of 9/11. But I would like to know how 9/11 changed your life and your investment strategy?

WARREN BUFFETT: It made everybody, I think, in the country aware, I mean, we’ve gone through world wars and all of that, and essentially felt quite protected within these borders.

And I have been quite worried about — Charlie can attest to — you know, the possibility, particularly of some kind of nuclear device in this country, by — probably more likely by terrorists than by some, at least, declared act of war by another state.

And 9/11 made everybody realize that as humans have not progressed, particularly, in terms of how they behave with each other over the years, they have progressed enormously in their ability to inflict damage on those they hate for one reason or another…

In terms of the business aspects of it, in your question, obviously the area at Berkshire that it effects most significantly, by miles, is insurance.

And prior to 9/11, even though we recognized that there could be huge monetary damages that flowed from the activities of what I would call deranged people, we hadn’t really written the contracts in such a way as to either get paid for taking that risk or to exclude the risk. In other words, we were throwing it in for nothing.

We had excluded risk for war. I mean, we knew that we’d seen what had happened in England in the 40s, and so we had taken account of something that some of us had seen with our own eyes, but we didn’t take account of something that we knew was possible, but we just hadn’t seen. And that’s, you know, that’s the human condition, to some degree.

Since September 11th, everybody in the insurance business recognizes that they had exposures that they weren’t charging for, and they either had to exclude those exposures or they had to charge for them.

We have written — first thing we had to do, of course, is we had lots of policies on the books that left us exposed to this, and most of those policies ran for a year, starting at different points. Those have run off to a great degree, but they’re not entirely run off.

The other thing we did was on new policies. We have sold a fair amount, quite a large amount, of terrorism insurance that excludes what we call NCB, nuclear, chemical, and biological, as well as fire following nuclear.

And, we can take a fair amount of exposure to that sort of terrorism, because it doesn’t — it won’t aggregate. It aggregated at the Twin Towers in a way that — World Trade Center — in a way that just about was as extreme as you could get for non-NCB-type activities.

I mean, that was a huge amount of damage done without nuclear, chemical, or biological.

But we can have tens of billions of dollars with NCB excluded throughout a greater New York area, or something, but we can’t have hundreds of billions of exposure that would be exposed, say, to, nuclear activities, because there an act or two, or three, coordinated, could cause damage that would destroy the insurance industry.

And if we had coverage on that, it would destroy us as well.

BERKSHIRE STOCK WATCH

Four weeks

Twelve months

BRK.A stock price: $766,000.00

BRK.B stock price: $510.37

BRK.B P/E (TTM): 12.83

Berkshire Cash as of June 30: $365.5 billion (Down 8.0% from March 31)

Excluding Rail Cash and Subtracting T-Bills Payable: $359.2 billion (Down 3.8% from March 31)

Berkshire repurchased $4.5 billion of its shares in Q2 2026.

BERKSHIRE’S TOP EQUITY HOLDINGS – Sep. 11, 2026

Berkshire’s top holdings of disclosed publicly traded stocks in the U.S. and Japan, by market value, based on the latest closing prices.

Holdings are as of June 30, 2026, as reported in Berkshire Hathaway’s 13F filing on August 14, 2026, except for:

– Mitsubishi, which is as of April 30, 2026

The full list of holdings and current market values is available from CNBC.com’s Berkshire Hathaway Portfolio Tracker.

QUESTIONS OR COMMENTS

Please send any questions or comments about the newsletter to me at alex.crippen@cnbc.com. (Sorry, but we don’t forward questions or comments to Buffett himself.)

If you aren’t already subscribed to this newsletter, you can sign up here.

Also, Buffett’s annual letters to shareholders are highly recommended reading. There are collected here on Berkshire’s website.

— Alex Crippen, Editor, Warren Buffett Watch

Technologies

Wall Street firm warns AI stock rally may be nearing its end: key reasons

Capital Economics says that while the S&P 500 may keep rising this year, the AI‑driven rally shows multiple bubble indicators and is expected to peak within months, with a projected decline to 6,500 by late 2027.

Various signs of a market bubble indicate that although the S&P 500’s rally can continue this year, its medium‑term outlook appears weak because the market has become overly frothy, according to Capital Economics.

James Reilly, senior market economist at Capital Economics, noted on Thursday that most indicators point to the AI equity rally being close to its end.

Since mid‑2023, Capital has been more optimistic than most about the stock market, viewing AI as a transformative technology.

The firm’s year‑end 2026 S&P 500 forecast has consistently exceeded consensus estimates.

Nevertheless, Capital maintains that the AI‑driven rally is a bubble destined to burst.

To identify a late‑stage bubble, Reilly examines eight metrics: valuations, earnings, index concentration, equity issuance, and foreign interest in U.S. stocks.

Several of these metrics are already at or near levels seen before past market peaks.

While earnings expectations appear aligned with a market top, measures such as volatility and leverage are somewhat less concerning.

Earnings are the most significant warning sign.

S&P 500 earnings growth expectations are hovering at levels only seen at the dot‑com bubble peak, and long‑term EPS forecasts have reached a record high.

Reilly argues that the tech sector’s heavy concentration of this growth means any weakness in tech earnings will heavily drag on the index.

Additional warning signals are also emerging.

Index concentration is approaching dot‑com era extremes, net equity issuance has turned positive, and foreign ownership of U.S. stocks is at a record level.

Reilly warns that another wave of IPOs and share sales could be especially significant, as past issuance booms have historically coincided with market peaks.

He adds that, based on history, the bubble’s end is likely just months away, not years.

Leverage measures are not yet alarming compared with other factors, though the analyst cautions they are moving in a concerning direction.

Volatility indicators resemble those of a mid‑stage bubble, but constituent‑level volatility is not as extreme as at the dot‑com bust’s end.

Reilly expects the S&P 500 to rise from roughly 7,650 now to about 8,250 by the end of 2026, but ultimately projects a decline to 6,500 by the end of 2027.

These projections imply an 8% gain this year and a 21% drop in 2027.

Most signs point to the AI equity rally being close to its conclusion, Capital Economics senior market economist James Reilly stated on Thursday in a note.

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