The US stock market has become increasingly concentrated as only ten stocks account for over one-third of total market capitalization. Yet not only is the market becoming ever more concentrated, seven of those stocks accounted for over 55% of the market return this year and each are tied to growth in artificial intelligence. More than ever, the stock market is tied to one theme—artificial intelligence. The stock market is hitting new highs and is now trading at a level that is equal to a composite of our fair values. Valuations on AI stocks in particular incorporate heady demand growth for artificial intelligence over the next five years. Without any margin of safety from our intrinsic valuations, there is no room for error for AI stocks to perform in line with base case expectations. In a market priced for perfection, is there anything left that’s undervalued? Join Morningstar’s Dave Sekera, CFA, Chief US Market Strategist, Preston Caldwell, Chief US Economist and Kai Wang, Asia Market Strategist, as they review market valuations in light of AI dynamics, trade & tariff negotiations, slowing rate of economic growth, and our expectations for monetary policy. We will review valuations across styles, sectors, & stocks to identify those areas we think investors should be positioned to benefit from where undervaluation remains and underweight those areas that have become overextended. View the full report here: https://www.morningstar.com/business/insights/research/stock-market-outlook 00:00 U.S. Equity Market Valuation, Dave Sekera 01:15 Sector Valuations and Top Picks, Dave Sekera 22:55 U.S. Economic Outlook, Preston Caldwell 38:22 Asia Equity Market Valuation, Kai Wang 48:52 Fixed Income Outlook, Dave Sekera 54:31 Q&A