Big Tech Stocks at Cheapest in Months Fail to Entice Wary Buyers
The tech-heavy Nasdaq 100 Stock Index dropped 2.5% on the week and is down 11% from a record high in February.
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In the recent market selloff, the valuations of big technology companies have fallen from the lofty heights. Many traders, though, are betting that the declines may well have further to go, and recent history offers evidence to back them up.
The price that investors are paying for anticipated earnings from the so-called Magnificent Seven companies hit the lowest level since September this week as the broader S&P 500 dropped 10% from its recent peak. But these valuations are still far from the lows reached in 2018 and 2022 when the profits of tech giants were under pressure, and there are now more factors clouding the horizon.