A growing number of investors believe the stock market is in a bubble as bullish sentiment reaches pre-pandemic levels, an E*Trade survey finds

• 69% of investors surveyed by E*Trade say the stock market is in a bubble.
• The survey also found that investor bullishness has reached pre-pandemic levels.
• Major firms like Goldman Sachs have recently rejected the notion that stocks are in a bubble.

An increasing majority of investors believe the stock market is in a bubble, according to the results from the latest E*Trade survey.

Out of 957 active investors who manage at least $10,000 in an online brokerage account, 69% of them think the market is either fully or somewhat in a bubble, according to E*Trade. That's up 3 percentage points from last quarter's survey.

Additionally, 22% of investors said stock valuations are "approaching a market bubble," while only 9% answered valuations are "not close to a market bubble."

The rising bubble concerns come as investor sentiment reaches pre-pandemic levels of optimism. Bullish sentiment increased 4 percentage points since last quarter, with 61% of investors answering they're "bullish" when it comes to the current market.

Meanwhile, concerns around coronavirus-related investment risk dropped from last quarter, with 22% of investors listing coronavirus as a top 2 portfolio risk, compared with 30% in the previous survey.

"Despite investor unease as interest rates shot higher over the last quarter, optimism grew as the market hit new all-time highs, vaccines increased, stimulus measures continued, and earnings estimates are high," said Mike Loewengart, E*Trade managing director of investment strategy.

The answer to whether the stock market is currently in a bubble is unclear across Wall Street. Goldman Sach's chief global equity strategist recently researched 300 years of market history and concluded that although many bubble characteristics are present in the market today, stocks are not in a full fledged bubble.

In his latest memo, billionaire investor Howard Marks said that most asset prices are in a reasonable "gray area" and that there's too many positives in the market to determine a clear answer to the bubble question.

But in January, British investor Jeremy Grantham said that the stock market is in a "fully-fledged epic bubble," driven by extreme overvaluations, explosive price increases, frenzied issuance, and "hysterically speculative investor behavior."