“Change is the only constant in life,” Heraclitus said that over 2,500 years ago, but he could just as easily have been talking about the stock market.
If you look at the top companies in the S&P 500 over the last four decades, the chart tells a story as dramatic as any history book.
In 1985, the giants were DuPont, IBM, and Exxon—pillars of an industrial age.
Fast forward to 1995, and we see Coca-Cola, Merck, and AT&T.
By 2005, the list shifts again: Walmart, Microsoft and Citigroup.
And now, in 2025, the titans are Apple, Microsoft, Nvidia, and Alphabet—names that barely registered a generation ago.
Here’s the surprising part: the companies that once seemed untouchable often vanish from the leaderboard within a decade or two.
It’s a reminder that dominance is fleeting. IBM, once a symbol of American innovation, lost its crown as the world moved from mainframes to personal computers and then to the cloud. It’s not failure—it’s evolution.
Investing, in this way, is a lot like surfing. You can’t control the waves, but you can learn to read them. Those who clung too tightly to oil in the ’80s or Japanese equities in the ’90s missed the swell that lifted technology in the 2000s. The lesson? Don’t marry the wave; marry the ocean.
History shows uncertainty often disguises itself as opportunity. The Industrial Revolution rewired economies. Electricity, aviation, and the internet built new industries while destroying old ones.
Jeff Bezos once reminded shareholders, “The stock is not the company”, after Amazon’s share price collapsed in the early 2000s. Those who focused on fundamentals, rather than fear, saw it become one of the most valuable businesses in the world.
Of course, risk is part of the journey. Just last year, a single faulty software update caused a global outage, grounding flights and freezing millions of businesses. That’s how dependent we’ve become on technology.
Yet that very fragility signals how deeply embedded digital infrastructure now is in our lives. If anything, it makes the case that investing in innovation is less about speculation and more about accepting reality.
Darwin wasn’t talking about markets when he said survival belongs to the most adaptable, but the principle applies perfectly.
Markets evolve. Technologies shift. Giants fall and new ones rise. The winners are not the strongest, nor even the smartest, but those willing to embrace change before it feels comfortable.
Centuries ago, when mapmakers reached the edge of the known world, they often sketched dragons in the margins. It was a warning: beyond this line, the future is uncertain. Some explorers took those dragons as omens and turned back. Others saw them as opportunities—and discovered entire new worlds.
And now comes artificial intelligence (AI), the most powerful wave yet. U.S. companies are projected to spend over $500 billion annually on AI capital expenditures in 2026 and 2027.
It’s created what some call an “infinity money glitch. Companies like Nvidia, Oracle, and OpenAI are reinvesting in their own ecosystem, creating a self-sustaining cycle that feels almost too good to be true.
Money flows in, valuations rise, spending accelerates, and back around it goes. But like all virtuous cycles, it can turn vicious if earnings disappoint or if markets decide that the dream of artificial general intelligence (AGI) is more fantasy than inevitability.
This is where the dragon metaphor becomes more than a story. On the edge of the map lies incredible promise—new industries, wealth creation, and tools that could reshape society. But there are also risks: over-concentration, inflated expectations, and the danger of mistaking momentum for inevitability.
The truth is, investing is never about certainty. It’s about judgement. About deciding whether the dragons we face are threats to avoid or opportunities to embrace.
And maybe that’s the real point: the safest path has never been the one that led to discovery.
As E.C. Mackenzie wisely put it, “The actions of men are the best interpreters of their thoughts.” Investing, at its heart, is not just about numbers on a screen—it’s about how we see the world, the future we believe in, and the risks we’re willing to take to get there.
We’re standing at the edge of another great disruption in AI. But like the dotcom era, bubbles are forming.
Back then, countless startups burnt out, yet giants like Amazon and Google rose from the ashes.
Today, Big Tech is far more profitable and resilient, but most AI players are still fragile startups. The dragons are back on the map—the only question is whether you’ll turn back or venture forward to see what treasures lie ahead.
Meanwhile, valuations are stretched for the S&P 500 P/E at 30, the Buffett Indicator is at record highs, and investor psychology has clearly shifted from optimism to euphoria.
AI now accounts for nearly 75% of market gains, yet consumer adoption is still tiny compared to corporate spending. This imbalance, combined with debt pressures and geopolitical risks, looks less like a sturdy foundation and more like Templeton’s final stage of a bull market dying on euphoria.
Awet Ghirmay, Head of Investment Research
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The value of investments and the income derived from them may fall as well as rise. You may not get back what you invest. This communication is for general information only and is not intended to be individual advice. You are recommended to seek competent professional advice before taking any action. All statements concerning the tax treatment of products and their benefits are based on our understanding of current tax law and HM Revenue and Customs practice. Levels and bases of tax relief are subject to change. This blog is based on my own observations and opinions.
