Tech stocks are partying like it’s 1999 – and investors should be wary
Tech stocks are experiencing significant gains, reminiscent of the late 1990s dotcom boom. However, experts caution that the current market is heavily reliant on technology, which may not be sustainable. Investors are advised to consider the potential risks associated with inflated stock prices and the assumptions underpinning them.
- ▪The tech sector now accounts for 37 percent of the S&P 500 index's value, a record high.
- ▪Nvidia Corp. is valued higher than the entire Canadian stock market and the healthcare sector of the S&P 500.
- ▪The average price-to-sales ratio for S&P 500 stocks is currently 3.65, significantly above the 30-year average of 1.81.
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ShareSave for laterPlease log in to bookmark this story.Log InCreate Free AccountParty on! Stock markets just want to have a good time and right now they are cranking up the music and ignoring the banging on the walls. Forget the Strait of Hormuz, forget rising inflation. Stock prices are going to the moon.And why not? The earnings season that is just wrapping up on Wall Street was spectacular, with companies in the S&P 500 index reporting profits that were more than 25 per cent higher than a year ago, according to market maven FactSet. Forecasters from Royal Bank of Canada, HSBC and Yardeni Research have hiked their year-end targets for the S&P 500.
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