If we were living through a real AI bubble, CEOs would be cashing in. They would be selling stock hand over fist, launching IPOs, and shoveling shares into the market while prices are hot. But they’re not. Corporations have spent the past year doing the opposite: buying back roughly $1 trillion worth of stock. That’s one trillion reasons to think we’re not in bubble territory.
Executives tend to be the smartest money in the market. When prices look frothy, they issue shares. When stocks look reasonably priced, they repurchase them. Right now, companies are acting like buyers, not sellers. That’s a big tell.
A History of Bubbles Told Through Supply
Every major market bubble has had the same calling card: a flood of new shares.
In 1720, the South Sea Bubble spawned nearly 200 new companies in a few frantic months. In the late 1890s, Britain’s Bicycle Boom cranked out more than 600 new firms. The roaring 1920s saw a surge of stock issuance thanks to aggressive underwriters. Japan’s late-80s mania brought a wave of listings. And the dot-com era? Nearly 400 IPOs in 1999 alone.
The pattern is simple. Prices rise, enthusiasm spikes, companies respond by issuing stock into that demand. Supply eventually overwhelms optimism, and the air comes out.
The “Smart Money” Indicator
There’s an easy way to track when corporate America is feeding shares into the market.
Look at net issuance:
If it’s positive, companies are selling stock.
If it’s negative, they’re buying it back.
During the dot-com bubble, issuance flipped sharply positive in 1999, peaked in early 2000, and then collapsed as buybacks took over once things burst. You could’ve spotted the bubble without knowing any history, the data alone told the story.
Short sellers didn’t break that bubble (most pulled back as prices ripped higher). Issuance did. New shares acted as the “pressure valve” that eventually cooled things off.
What a Century of Data Shows
Zoom out to 100 years and the pattern becomes even clearer.
The U.S. market saw heavy issuance in 1929, again in 2000, and a smaller bump in 2021. Outside of those periods, companies mostly repurchased stock, especially after buybacks became mainstream in the 1980s.
The most recent reading through September 2025? Negative 0.9%. That’s right around the long-run average for the past two decades. In today’s environment, shareholders are receiving:
roughly 1.2% in dividends, plus
roughly 0.9% from buybacks,
for a 2.1% total cash yield.
That is not bubble behavior. That is cash-returning-machine behavior.
Is the AI Market a Bubble?
If you rely on the indicator with the best historical track record, the answer is no.
No wave of IPOs
No spike in equity issuance
No corporate rush to sell stock into “peak enthusiasm”
Companies still aggressively repurchasing shares
Speculation exists. AI hype is loud. Some corners of the market move like meme stocks. But the core signal, the one that has predicted every major U.S. bubble isn’t blinking red. It isn’t even blinking.
Could that change fast? Absolutely. In 1999, issuance was slightly negative. Twelve months later, it hit 5%. Froth can build quickly.
But for now, the bubble diagnosis is simple: without a flood of new supply, it’s not a bubble.