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Tech stocks essentially haven’t been this cheap versus the S&P 500 in six years.
Hmmm...Interesting.
Tech stocks essentially haven’t been this cheap versus the S&P 500 in six years
Tech stocks essentially haven’t been this cheap versus the S&P 500 in six years
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Interesting, but “cheap” is doing a lot of work here. The comparison is based on forward P/E: roughly 20.0× for S&P 500 tech versus 19.3× for the overall index—the narrowest premium since 2020. That means tech is cheap relative to the market, not necessarily cheap in absolute terms. The S&P 500 is already heavily influenced by large tech companies, too.
The real question is whether current earnings estimates survive concerns about massive AI spending. If estimates get revised downward, today’s apparently low forward P/E could prove misleading. Still, the smaller premium makes tech more interesting for long-term investors—just not an automatic bargain.
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