"AI Bull" Market Extends to 1,200+ Days: Historic Milestone Amid Extreme Valuations

The current S&P 500 bull market, dubbed the “AI Bull” for its origins in artificial intelligence-driven growth, has achieved a significant historical milestone by extending beyond 1,200 days since the October 2022 bottom [1]. This achievement places the current rally among an elite group of only 10 bull markets in S&P 500 history to surpass the 1,000-day threshold, according to Bespoke Investment Group data [2]. The index closed at $6,941.47 on February 11, 2026, approaching its all-time high of $7,002.28, though today’s trading revealed notable sector rotation with Technology declining 0.95% and Financial Services falling 2.26%, while defensive sectors like Basic Materials gained 1.77% [0].

The duration of this bull market significantly exceeds the historical average of approximately 1,011 days, currently running about 19% longer than the mean [2][4]. However, this longevity occurs against a backdrop of historically extreme valuations that warrant careful consideration. The Shiller P/E ratio (CAPE) stands at approximately 39.8-40, representing levels seen only twice since the 1870s—specifically during the late 1990s tech bubble [3][6]. This reading is 125% above the historical average of 17.7 and 145% above the geometric mean, suggesting markets are “priced for perfection” and vulnerable to even minor macroeconomic headwinds [3].

The AI sector’s explosive growth, exemplified by NVIDIA’s fiscal Q3 2026 revenue of $57 billion (up 62% year-over-year), has been the primary driver of this extended rally [5]. NVIDIA’s stock has returned 771.98% over three years, though it shows signs of consolidation with a 1.63% decline over the past three months [5]. This concentration in mega-cap AI leaders creates what analysts describe as “the most significant points of failure for the broader market” [3].

The market’s internal dynamics reveal a complex picture beneath the headline all-time highs. While the S&P 500 remains near record levels, the NASDAQ Composite has declined 3.70% over the past 90 days, suggesting concentration risk in technology-heavy indices [0]. In contrast, the Russell 2000 has gained 7.59% over the same period with higher volatility of 1.21%, indicating expanding market breadth beyond mega-cap technology—a potentially constructive development for medium-term duration [0]. This rotation pattern, where defensive sectors outperformed while cyclical sectors weakened on February 11, may signal short-term caution among investors.

The historical context provides important perspective. The longest bull market in S&P 500 history was the remarkable 4,494-day run from December 1987 to March 2000, driven by the tech boom era [1]. Current market structure shows the equity risk premium has “evaporated to near zero” at these valuation levels [3], and markets trading at such extremes historically correlate with below-average subsequent returns over extended horizons.

International market comparisons reveal that European and emerging market indices are trading at “significant discounts” to U.S. valuations [3], potentially representing alternative allocation opportunities for investors seeking more reasonable valuations, though this also reflects structural growth differentials between regions.

The analysis identifies several elevated risk indicators warranting attention:

: The Shiller P/E at ~40 represents historically rare territory. According to Advisor Perspectives, this level has only been seen once since the 1870s, preceding both the Great Depression and the dot-com crash [6]. The CAPE ratio at these levels historically correlates with below-average returns over subsequent periods, and markets at these valuations are described as vulnerable to even slight macroeconomic headwinds [3].

: AI and mega-cap technology stocks, particularly NVIDIA (trading at 46.6x P/E and 38.88x P/B), have driven this rally but also create concentrated risk exposure [5]. The narrow leadership base means disappointments in these stocks could disproportionately impact broader market indices.

: Today’s defensive sector rotation—Technology declining 0.95%, Financial Services falling 2.26%, and Industrials dropping 1.41%—suggests short-term caution signals [0]. When market leaders weaken while defensive sectors rise, this pattern historically precedes periods of increased volatility.

: NVIDIA’s 62% year-over-year revenue acceleration demonstrates the fundamental earnings growth supporting AI-related valuations [5]. Strong corporate earnings provide a floor for market valuations, though sustainability beyond current growth rates remains uncertain.

: The Russell 2000’s 7.59% gain alongside the NASDAQ’s decline suggests participation broadening beyond mega-cap tech [0]. Sustained breadth expansion could extend the rally’s duration by distributing returns across a wider base of equities.

: Non-U.S. indices trading at significant discounts to U.S. valuations [3] may offer opportunities for investors seeking more reasonable entry points, though investors should weigh this against region-specific growth and structural considerations.

This analysis synthesizes data from multiple sources to provide an informational overview of the “AI Bull” market milestone and its implications:

Indicator	Current Level	Historical Context
Bull Market Duration	1,200+ days	10th in history to exceed 1,000 days; 19% above 1,011-day average
Shiller P/E	~39.8-40	125% above 17.7 historical average; rare territory
S&P 500 Level	~$6,941	Near all-time high; $7,002.28 peak
NVDA 3-Year Return	+771.98%	Primary AI Bull beneficiary
Russell 2000 90-Day	+7.59%	Outperforming NASDAQ (-3.70%)

Key factors warranting monitoring include: Shiller P/E sustainability above 35, AI sector earnings acceleration or deceleration, sustained rotation patterns from growth to defensive sectors, Federal Reserve policy trajectory impacting growth stock valuations, and VIX volatility spikes above 20-25 levels [0][3].

The combination of extended duration, extreme valuations, and emerging sector rotation patterns suggests elevated risk compared to historical averages. Prudent risk management is advisable, though precisely timing market tops remains notoriously difficult given the continued fundamental support from AI sector earnings growth.