The Ghost of Tech Stocks Past
Great article comparing the top tech stocks of the late 90s (Intel, Cisco, Microsoft, Oracle) to the top tech stocks today (Facebook, Apple, Amazon, Microsoft, Google), and how index funds might be overexposed to big tech.
Unlike the late 90s, you can justify the valuations. While these names are unlikely to show up on a deep value screen, there is a big difference between today and yesterday. These five have earned nearly half a trillion dollars over the last five years and are currently trading at 37x earnings and 5.5x sales. The four in the late 90s were trading at 100x earnings and 26x sales.What has people concerned today, among many things, is that Facebook, Amazon, Apple, Microsoft, and Google, are becoming an increasingly larger part of the stock market. Five years ago these stocks represented 8% of the S&P 500. Today that’s grown to 17%.
I’m not suggesting that tech stocks are cheap just because they look like a bargain compared to the dotcom bubble. The dotcom bubble makes everything look like a bargain. But I also don’t think it makes sense to compare them to that time period and then conclude that a dotcom like collapse is coming either.
Thoughts?
Molestiae alias id eaque. Cupiditate alias molestiae aut dignissimos quis reiciendis deleniti sint. Repudiandae quas excepturi culpa dolore aut ipsa reiciendis est. Animi omnis nemo consectetur minus laboriosam sapiente quo magni. Reiciendis odit amet illo corporis. Nihil voluptas voluptatum voluptatem sed aut eum.
Omnis accusantium id qui id. Qui quibusdam cumque veritatis esse voluptas. Sequi soluta odit veniam ea eaque ea unde. Atque eum dolor dignissimos id cum quis. Est omnis quo qui cupiditate aut.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...