Is a massive bubble in US tech stocks coming—or is it already here?

You know the stock market has gone bonkers when even CEOs are baffled by their companies’ soaring share prices.

First it was Tesla founder Elon Musk, who said in May that the electric carmaker’s stock was overvalued. (Tesla shares have rocketed more than 300% since then.) Airbnb’s chief exec Brian Chesky was speechless last week when Bloomberg Television informed him that the property-sharing firm’s stock had doubled in price in its first day of public trading. DoorDash chief Tony Xu, whose food delivery company’s shares jumped 85% in their debut, told The Information that management had priced the shares carefully, but “everyone is entitled to their own opinion.”

Runaway shares for recent IPOs—like DoorDash and Airbnb, but also Snowflake, the cloud computing company that went public in September—have put executives at those companies in an awkward position. Their chiefs have suggested that the stocks’ opening price, not necessarily the price after the first day of trading, was indicative of the firms’ valuation, said Max Gokhman, head of asset allocation at Pacific Life Fund Advisors, which oversees $32 billion. “They’re basically saying our stock is overvalued right now,” Gokhman said. “That’s not something I’ve ever heard a CEO say, until this year.”

“I appreciate that kind of honesty, but, on the other hand, obviously, I’m not going to buy a stock if even the CEO agrees it’s overvalued,” he added.

Some important measures signal that US stocks are in territory we haven’t seen since the turn of the century, when the dot-com bubble popped. Nobel-prize winning economist Robert Shiller has promoted the cyclically adjusted price-to-earnings ratio, which compares the S&P 500 Index of large US companies to the 10-year average of their earnings. That measure is at levels last seen in 2001, when a gigantic rally in internet stocks was imploding.

One of the stories investors are telling themselves is that stay-at-home orders because of the pandemic have accelerated the future of commerce. Even after vaccines (hopefully) succeed in helping contain Covid-19, people will keep shopping and doing business online in ways they didn’t before, the thinking goes. The tech-heavy Nasdaq 100 Index of stock has jumped about 42% this year, leaving the broader S&P 500 Index, with a 15% gain, in its dust.

IPOs were on fire even before the last crop, like Airbnb and DoorDash, came along. They’ve jumped about 36%, on average, during their first day of trading, according to data compiled by University of Florida professor Jay Ritter. That’s the highest average of any year since—you guessed it—the dot-com bubble.

The CEO of the world’s largest asset manager said investors should be careful when it comes to the IPO market. According to Bloomberg News, BlackRock’s Larry Fink warned at a Dec. 11 virtual event that stock offerings are soaring to “unsustainable” levels.  “The question is: Is the market pricing in too large of a forward growth rate for these companies?” he said.“There are going to be many accidents.” Len Sherman, an adjunct business professor at Columbia Business School, thinks DoorDash could be one of those accidents. He argues that it charges a lot for its service, doesn’t pay its couriers very much, and still struggles to generate convincing profits.

Retail traders may get some of the credit (or blame) for the latest stock boom, particularly for IPOs. There’s no question that armchair investors have flocked to stock trading apps as trading commissions vanished. Fractional share trading has also opened the door to everyday traders who don’t necessarily have big bank accounts. Several brokerages allow traders to buy a slice of a stock, rather than having to purchase the whole thing (a single share of Google costs more than $1,700). This may well have unlocked a new source of (inexperienced) demand for equities.

Still, as crazy as things are, there are some key differences between the pandemic-era tech rally, and the one in the late 1990s, Gokhman says. Airbnb and DoorDash are real businesses, with a product and actual cashflow. You couldn’t say that for some of the high-flyers in the internet boom. “In dot-com bubble, we had companies that had no business being companies,” he said.

Even Yale’s Shiller, author of Irrational Exuberance, the seminal book about boom and busts, has recently been reluctant to label the latest mania a bubble. In a post late last month with Laurence Black and Farouk Jivraj, Shiller acknowledged that stock markets are probably being driven partly by the stay-at-home story and fear of missing out. But they point out that interest rates also play an important role that some may have underestimated. The yield you can earn from owning a risk-free Treasury bond is a core component of stock valuation models. In a world where real interest rates (Treasury yields minus the rate of inflation) are negative, equities look more attractive. Based on these economists’ calculations, at least when compared to government bonds, stocks don’t look so pricey (though as Bloomberg’s John Authers argues, if bonds are ridiculously expensive, maybe that’s not saying much).

Gokhman notes that tech has another problem ahead in 2021—officials in Washington have put some of the most valuable companies, like Facebook, in their antitrust crosshairs.

Gokhman thinks even smaller firms that are newer to public markets are going to have to come back down to Earth next year. But that’s not the same as what happened two decades ago, when many tech companies went up in smoke. “There could be a course correction,” he said. But “it’s not going to take these names out of circulation.”