Technologies

After 30 Miles of Running, I’ve Found the Most Accurate Smartwatch

Apple, Garmin, Samsung, Google or Amazfit? One dominated heart rate, but steps and distance accuracy were a different story.

Key takeaways:

All five watches tracked steps and distance accurately, but heart rate accuracy varied.
The Apple Watch Series 11 was the most accurate heart rate monitor during workouts.
The Garmin Venu 4‘s heart rate tracking has more data, ideal for serious training analysis.
If steps and distance accuracy are your priorities, you don’t need an expensive smartwatch.

Training for a marathon definitely wasn’t in the cards when I began this project. Testing five smartwatches for accuracy looked to me more like a few leisurely jogs, rocking what looked like the entire smartwatch section of Best Buy stacked on my wrists. I’ve tested dozens of smartwatches over the years, but never five at once, and never under the level of scrutiny this test demanded. Mile after mile, I pushed my heart rate (and my body) well beyond my comfort zone with the finish line in focus.

Fitness trackers have come a long way since the early Fitbit days of step counting, and in today’s wearable landscape, a reliable step counter isn’t enough. Smartwatches, rings, fitness bands and even earbuds compete for real estate on your body to monitor everything from heart rate to temperature. To edge out the competition, they must be accurate enough to catch subtle changes in your vitals and turn that data into results.

I tested five models (one at a time), ranging from $80 to $550, to determine which was most accurate for steps, distance and heart rate. Heart rate, in particular, is the most critical (and the hardest to get right) since so many other metrics depend on it.

It’s not like I was starting from scratch. I’d already reviewed the Samsung Galaxy Watch 8, Google Pixel Watch 4, Garmin Venu 4, Apple Watch Series 11 and Amazfit Bip 6, and each had proven itself in its category. There’s a reason they landed on our best lists. But glancing at a workout summary and dissecting raw data are entirely different beasts.

After two months and more than 30 miles of testing, I’m finally ready to share the results (and give my legs a rest). The biggest takeaway: All five watches performed well in real-world testing. None deviated by more than a few percentage points from the control when measuring steps and distance.

Heart rate accuracy proved to be the biggest differentiator. On the surface, the watches looked similar: average and maximum heart rates were often only a few beats apart. But the gaps became clear in the second-by-second data. While most stayed within 8% of our control, the Apple Watch Series 11 remained within 1% of the Polar H10 chest strap, which served as our control, earning it the CNET Labs Award for most accurate heart rate tracking.

The Garmin Venu 4 came in second, recording heart rate every second compared to every 5 seconds on the Apple Watch. For most people, that level of granularity is overkill, but for serious athletes who depend on second-by-second feedback, it could be the deciding factor.

Heart rate: electrodes vs. optical sensors

Heart rate is one of the most important vitals your smartwatch tracks because it feeds into so many other metrics, like calories burned, intensity, heart rate variability (a measure of the variation in time between heartbeats), and VO2 max (the maximum amount of oxygen your body uses during exercise). As a casual fitness enthusiast, I regularly use live heart rate data from my watch to make runs and strength training workouts more intense.

Most smartwatches, including the five we tested, take background heart rate readings at intervals throughout the day. However, they increase sampling frequency during exercise. Even a short workout can generate hundreds more data points than passive tracking alone.

CNET’s heart rate test

To capture a broad range of heart rate data, I tested each watch individually across three separate 1-mile runs on a flat track. I held a moderate intensity for the first half of the run (roughly Zones 3 to 4), then went all out for the second half, pushing myself as close to my peak (Zone 5) as possible.

I cleaned the sensors and secured each watch snugly (about one to two fingers below the wrist bone) before each run. Each watch was tested one at a time alongside a Polar H10 chest strap, CNET’s top-rated consumer heart rate monitor. Unlike wrist-based optical sensors, which detect changes in blood flow using light, chest straps like Polar’s use electrodes to directly measure the heart’s electrical signals. Because of this method and proximity to the heart, chest straps are widely considered more precise than wrist-based devices. Matching that level of precision isn’t realistic for a watch, but they’re coming close.

During testing, I noticed a consistent pattern: most watches lagged behind the chest strap during the first minute of a run, when heart rate rose rapidly from rest. Once I reached cruising altitude (Zones 3 and 4), the readings aligned more closely. But when I pushed into Zone 5, differences reappeared, with some watches struggling to keep up during spikes above 160 beats per minute. The Bip 6, for example, never registered my peak heart rate. That lag helps explain why workout summaries often look similar. Average and peak heart rate were just a few beats away from the chest strap, while the second-by-second analysis revealed significantly wider gaps.

Because raw, second-by-second heart rate data isn’t easily accessible in most apps and can include thousands of data points, I teamed up with CNET Senior Lab Engineer Gianmarco Chumbe to interpret and map the results. The graph above shows just how close the Apple Watch Series 11 was to the Polar chest strap, with an error rate of less than 1% (an average of 1.4 bpm for the three tests). In our results, it tracked almost side-by-side throughout the run, even at the outer edges of the graph where the other watches struggled. This consistency earned it our Labs Award for most accurate heart rate tracking. There is, however, an important nuance.

The Apple Watch data we extracted (via the HealthFit app pulling from Apple Health) sampled heart rate roughly every five seconds. By comparison, the Polar chest strap and Garmin Venu 4 recorded data nearly every second. Of the data points we could compare, the Apple Watch was closest to the chest strap, but it had fewer data points. The Venu 4 matched the chest strap’s sampling frequency, but with a slightly higher error rate of 3.89% (5.5 bpm). Those extra seconds of data could help guide training decisions and, over time, mean the difference between finishing strong and setting a new personal record.

All of the watches posted heart rate error rates below 8%, which is impressive — especially at higher-intensity levels. It’s worth noting these were short workouts (8-9 minutes per run). Because the Google Pixel Watch (5.6% error rate) and Samsung Galaxy Watch (6.6%) tended to catch up to the chest strap over time, longer runs would likely narrow some of those gaps. The Amazfit posted a similar overall error rate (7%), but struggled to capture the highest heart rate spikes. That limitation makes it less ideal for prioritizing heart rate precision for intense workouts.

After over 30 miles of testing, I’m more convinced than ever that heart rate accuracy really does impact training. Over six weeks, my VO2 max climbed from 41.3 to 45.8, according to Apple Health. I haven’t reached that level since before my third pregnancy three years ago. Without the watches and chest strap as a guide, I might not have recognized what “pushing myself” actually felt like in the moment.

CNET distance test

Measuring distance proved significantly easier, both physically and technically. Distance accuracy matters because it also feeds into other metrics, such as pace, calories burned and training load (the duration and intensity of exercise over a specific period of time).

The most reliable way to test distance was on a route with precise measurements and minimal elevation change. (Credit goes to Gianmarco for suggesting a track test.) Most high school and college tracks are built to official specifications: 400 meters per lap. I found an old college track near my house that had been paved over, but remained within regulation length. I even broke out a measuring wheel to be sure. I ran every single test on this track, reliving high school mile day 30 times over, but with more knee pain.

While GPS is a major factor in outdoor tracking, distance is also calculated using accelerometer and motion sensor data. To control for variables, I put the watch’s paired phone on airplane mode before each run to prevent it from using GPS. I photographed each watch display after every lap (400m increments) to capture a data point, repeating the process four times (1,600m is a little more than 1 mile).

All five watches were within a tenth of the actual distance, which is an impressively tight spread. The Apple Watch again led the pack, measuring my runs at 0.99 miles for all three tests. The runner-up was the Garmin Venu 4, which averaged 0.96 miles per test (only 0.03 miles behind the Apple Watch).

Accurate distance tracking isn’t reserved for premium price tags. The $80 Amazfit Bip 6 averaged 0.95 miles per test, proving it is more than capable for casual walkers or joggers looking to log miles.

CNET’s step test

Once considered the holy grail of fitness tracking, step count has slid down the metric hierarchy as more advanced health markers have taken center stage. And while the 10,000-step goal is somewhat arbitrary, it set a target and got people moving.

Today, we know it’s less important to hit a specific step count and more about walking and your progress over time. Steps remain an accessible starting point for many people, and accuracy is important. “Extra credit” from a faulty tracker can lull people into a false sense of accomplishment. And if a device can’t nail the basics, it raises questions about the rest of its metrics.

While pedometers were once considered the gold standard in this category, a $10 model today is likely less precise than the smartwatches on this list. Traditional pedometers use a simple mechanical switch triggered by hip movement, while most modern smartwatches use accelerometers and motion sensors to detect and measure movement in multiple directions.

To test accuracy, I went old-school and counted every single step myself with a manual tally counter (like what you use for baseball). I also used StepsApp, a pedometer app on my phone, as a backup. I started with 1,000 steps for each watch on a flat path. I didn’t use the track, but didn’t follow the exact same route for every test, which may introduce minor variance.

The results were impressively tight; all within about 10 steps of the clicker. The Galaxy Watch 8’s results (18 steps off) were the exception, but I suspected it might be a fluke. So I re-tested and raised the stakes; this time, walking 2,500 steps with each watch. The results were nearly identical. None deviated by more than 11 steps, or less than half of a percentage point.

The differences were negligible, so all of the watches were winners in this category, proving that you don’t have to splurge for accuracy. That Amazfit Bip 6 is looking pretty fantastic right now.

Twists, turns and variables to consider when tracking workouts

Even with the best intentions, 30 miles of testing and a data scientist in my corner, there is no way to eliminate every variable in real-world conditions. These results aren’t gospel. They’re rigorous, repeated and carefully averaged, but they’re still human, and your mileage may vary (pun intended).

It took more than 30 miles of testing before I felt comfortable putting results down on paper because I kept encountering variables, especially for heart rate.

The testing order was significant. The first watch in any session was always at a disadvantage because my heart rate started lower and spiked more dramatically. By the second and third runs — even with deliberate rest periods to bring my heart rate back down — the jump wasn’t as sharp. Your body doesn’t fully reset that quickly.

To mitigate this, I rotated the starting watch for each session. I limited each outing to three runs (three miles total), making sure that every device had a chance to be tested first, middle and last. Our Labs data and results (on the charts in the story) are averages of the error rates across these three tests.

Fit and sensor interference were other issues. My jacket sleeve occasionally moved the watch; warmer days meant more sweat by mile three, which can interfere with optical readings, and then there was the time I almost cut off my circulation from wearing the Galaxy Watch too tightly.

The data extraction nightmare

Then came the data. Polar’s raw heart rate data can be downloaded as a .CSV file (spreadsheet) ready for analysis.

Garmin’s is almost as easy, as long as you have a data analyst and Reddit thread on hand. It can export workout-specific heart rate data as a .TCX file, which was foreign to me. Gianmarco wrote custom code, based on info he found on Reddit, to extract and convert the data into a format that matched Polar’s output. Amazfit required a similar conversion process.

Apple, Google and Samsung made us work for it. All three require exporting your entire health archive (and I mean everything, not just workouts or heart rate). For me, this meant downloading more than a decade of health data. Once extracted, the compressed file opens into a maze of nested folders with cryptic labels. The best strategy is to sort by date and hope that one of the files mentions heart rate.

For Google, I got lucky and found the right file after what felt like hours of searching. For Apple, several third-party apps are available that can do the sorting for you. I downloaded the $6 HealthFit app, which filters and extracts data directly from the Health app. However, the sampling frequency wasn’t as dense as the Polar strap, leaving fewer data points for comparison. It’s hard to say whether it would’ve been any different if I’d been able to extract it directly from the Health app.

With Samsung, the only workable option was to use the Strava app as a middleman. I started workouts in the Strava watch app and exporting the data to the desktop version. All of this took two people many hours across multiple days to figure out. Accessing your own health data shouldn’t be this hard.

Smartwatch accuracy bottom line

If heart rate accuracy is your top priority, the $400 Apple Watch Series 11 is what to buy. It was the all-around winner, consistently strong across every category and the most precise for heart rate, staying within 1% of the chest strap during runs.

But the bigger takeaway after 30 miles of testing is that you can’t go wrong with any of these watches; it just depends on what you value most.

The $550 Garmin Venu 4 may be better suited for data nerds and serious athletes. It’s Gianmarco’s pick: “The combination of high fidelity and clean export access makes it especially appealing for users like me, who want full visibility into their training data.”

It’s also the best option for Android phone owners wanting elite-level heart rate tracking.

The Pixel Watch 4 and Galaxy Watch 8 (both $350) are reliable for steps, distance and overall heart rate trends. You may not get the same second-by-second precision during intervals, but for everyday workouts, they’re more than capable. And the Amazfit Bip 6 is the reminder that accurate distance tracking doesn’t have to be expensive. For beginners looking to build a baseline without a major investment, it’s better than its $80 price suggests.

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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