“Tesla is acting like a meme stock,” Bill Gross remarked this week. “Sagging fundamentals, straight up price action.”

I don’t know what to say. That’s the way it is now, Bill. Fundamentals are passé, just like your career.

Sorry. That’s a bad joke. I actually like Bill Gross. A helluva lot more than the unapologetically self-important inheritor of Bill’s “Bond King” title, that’s for sure. (As a self-important jerk myself, I’m well-placed to judge Jeff Gundlach’s character. If I were anywhere near Jeff’s area code financially, I’d be completely insufferable. Like Jeff.)

Tesla — which I spent a few minutes editorializing around a few days ago — was on its way to an 11th consecutive daily gain mid-week. Regardless of where it closed Wednesday, it’s been a wild run.

The figure above looks… well, like a meme stock, to oblige Gross. It’s cartoonish. I suppose I’d gently note that Tesla’s always been something of a meme stock.

I’m sure hedge funds who were short are feeling aggrieved, but for f–k’s sake: Have they not learned not to short these kinds of names? And if you’re going to short one, Tesla? Really? With that guy at the helm? That guy who’s more than willing to risk an SEC inquiry just to prove a point to shorts? That guy who could jump onto his social media platform and launch the stock into the stratosphere simply by suggesting the company’s making progress developing a new, lower-priced sedan? That’s the guy you’re gonna play around with? The guy whose personal net worth is on par with the market cap of several large banks?

Anyway, I mention Tesla again because it’s now taken the baton as poster child of a narrow, “tech” rally that refuses to abate. Earnings season’s upon us, and consensus is looking for 9% YoY aggregate EPS growth, the highest bar since Q4 2021. Corporate America will probably clear that bar, which is to say I doubt earnings season’s going to be the catalyst bears are waiting on.

Collectively, the so-called “AI 5” (Alphabet, Amazon, Meta, Microsoft and, of course, Nvidia) are seen posting 17% sales growth. It’s hard to know what’s “priced in,” and God knows there’s a long way down in the event of a “bad” guide from an AI heavyweight, but I gotta say: The bearish narratives were so catastrophically wrong since October that it’d be a stretch to call them vindicated even if the S&P crashed 50% tomorrow.

Cue Morgan Stanley’s Mike Wilson, who at least had the good sense (and self-preservation instincts) to turn vaguely bullish on the mega-caps earlier this year. “I think the chance of a 10% correction is highly likely sometime between now and the election,” he told Bloomberg, in an interview this week. I agree but… well, I’ll let readers surmise everything I might’ve said after that ellipsis.

The figure below’s worth a quick highlight. It’s from SocGen, and it’s straightforward.

That’s the rolling two-year relative performance of the cap-weighted benchmark versus its egalitarian counterpart.

“The outperformance of mega-caps versus the average S&P 500 stock is at a critical juncture,” the bank said. “Narrow breadth typically occurs in a bear market or when a few concentrated stocks have the potential to take us into a ‘bubble.'”

So, this is pretty binary. It’s bubble or bust, right? Wrong. Well, it is binary. But only one of those two outcomes has any real chance of being realized. From here, the rally will either broaden out or we’re on the exhilarating road to a dot com-style mania, SocGen suggested. As the bank put it, it’s “breadth or bubble.”