18 Jul 2017
Market Metrics: Tech
- Posted by Dejan Pekic BCom DipFP CFP GAICD, Senior Financial Planner
Analysts are reporting that the technology sector has the highest forecast earnings growth in 2017 outside energy and materials.
The price index has just about reached the peak level last seen in the 2000 tech wreck but this time corporate profits are improved.
Still, tech sector valuations are stratospheric (think Amazon P/E 847, Salesforce.com P/E 465, Netflix P/E 282) with the most likely explanation being that the adoption of new technologies is changing the business model for every industry from retail to energy production.
Tech companies are effectively being priced for a larger slice of the same pie.
When will prices come back to some form of normality? Who knows!
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