Tech Stocks Are Getting Hit. Some Analysts Just Love Them More

The graph representing the Stock is seen on a TV screen at the New York Stock Exchange (NYSE) on August 14, 2019 in New York City. - Losses on Wall Street accelerated Wednesday as weak economic data from China and Germany and a key US Treasury benchmark exacerbated global recession fears. Near 1500 GMT, the Dow Jones Industrial Average had lost 535 points, or 2.0 percent, sinking to 25,743.88. The broad-based S&P 500 slid 2.1 percent to 2,866.33, while the tech-rich Nasdaq Composite Index dropped 2.3 percent to 7,831.75. (Photo by Johannes EISELE / AFP) (Photo credit should read JOHANNES EISELE/AFP/Getty Images)Photographer: JOHANNES EISELE/AFP

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March 26, 2021 at 10:45 AM UTC

Jeran here. I'm an equities reporter at Bloomberg, and if you’re a regular reader, you’ll note that I’m only called upon to write this newsletter when something goes awry in the stock market. Right now, we’re in the midst of the worst technology selloff in half a year. After peaking in February, the Nasdaq 100 fell 11% through early March. While the tech-heavy gauge has recovered some lost ground in the past two weeks, it’s still well off its highs.

The dip has echoes of the last tech rout in September, when the Nasdaq fell 11% in just three days. In both cases, concerns over sky-high valuations were at the heart of the market swoons. Each selloff occurred with the Nasdaq's price-to-earnings ratio above 40—a level that's higher than at any other point in more than a decade.