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Tech M&A Boom May Have to Wait for a Steeper Selloff

  • Tech still pricy, especially software, Cambiar’s Barish says
  • Nasdaq 100 is selling for 27 times estimated earnings

A couple of high-profile takeovers of video-game companies has stirred optimism that acquisitions will help technology stocks recover from the battering under way in the market now. That sentiment may be premature.

Sure, behemoths Apple Inc., Microsoft Corp., Inc. and Alphabet Inc. are sitting on more than $100 billion in cash and equivalents and buyers also have access to cheap financing if needed. But the Nasdaq 100 Index’s 8.2% slump from its November record doesn’t mean high-flying tech shares are suddenly inexpensive across the board.