Big Tech Stocks Still Teetering on the P/E Precipice

You call this Nasdaq rout a bear market?

Sure, stocks in this tech-heavy index have tumbled by 60% from their highs. But in bear markets past, valuations also have dropped -- to levels where they draw in long-term buyers. Only then can a lasting recovery kick in. And here's the bad news for tech bulls: The steep drop in tech valuations has yet to happen. In fact, the Nasdaq 100 needs to be halved in value before anything approaching real value returns.

To be sure, there'll be (legless) rallies in the Nasdaq from here, and some tech stocks will go up and stay up. But most won't, weighed down by valuations that usually exist only in the most maniacal of speculative bubbles. To some, this is obvious, but to many more, it's not. In short, plenty of investors are betting that the Roaring '90s will soon return. Looking at multiples, they never went away.

Rich Numbers

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