"Peter Oppenheimer, the chief global equity strategist for Goldman Sachs, points to the ratio of stock price to earnings (P/E ratio) of current major tech stocks compared against the ratios of stocks during past bubble bursts. Financial Times uses a variable width bar chart to show the difference."
"Besides the meme-ish Tesla stock, the rest (of the Magnificent 7) seem low in comparison. If you're looking for a sign that there's more room for the bubble to grow, this would be it."
"On the other hand, we talk in trillions of dollars now for these giant corporations while other areas of the economy seem less great. So use that information as you like."
Peter Oppenheimer highlights P/E ratios of major tech stocks compared to past bubble bursts. Financial Times presents the comparison with a variable-width bar chart. Aside from meme-ish Tesla, most of the Magnificent Seven show lower P/E ratios relative to historical bubble peaks. The lower relative P/Es imply there may be room for valuations to expand further if investor behavior continues. Market capitalizations now reach trillions of dollars for tech giants while other economic sectors show weaker performance. The juxtaposition emphasizes valuation concentration and uneven broader economic strength.
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