Tech stocks are now cheaper than the S&P 500 for the first time since 2017
Technology stocks are now trading at a valuation discount relative to the broader S&P 500 for the first time since 2017. The technology sector's forward earnings multiple dropped to 17.1 compared to 17.9 for the S&P 500. This valuation shift follows a sharp correction across the technology sector, driven by a broader selloff in artificial intelligence valuations and a nearly 30 percent decline in chip stocks over a five-week period.
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- ✓ Tech stocks trade at 17.1 times forward earnings versus 17.9 for the S&P 500.
- ✓ The valuation discount is the first observed since 2017.
- ✓ Chip stocks lost nearly 30 percent in five weeks.
- ✓ The S&P 500 information technology sector traded at a discount to the broader market.
What changed
Technology sector valuations dropped below the broader market for the first time in nearly a decade.
Live updates
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Tech Stocks Cheaper Than S&P 500 For First Time Since 2017
Technology stocks are now trading at a valuation discount relative to the broader S&P 500 for the first time since 2017. The technology sector's forward earnings multiple dropped to 17.1 compared to 17.9 for the S&P 500. This valuation shift follows a sharp correction across the technology sector, driven by a broader selloff in artificial intelligence valuations and a nearly 30 percent decline in chip stocks over a five-week period.
Why it matters
The technology sector experienced severe downward pressure recently, dragging down major indices like the Nasdaq 100 and the S&P 500 while defensive sectors and energy held firm. Analysts are divided on whether these lower valuations represent an attractive entry point for investors or a warning signal regarding future market performance. The dramatic contraction of the sector's forward earnings multiple from above 32 highlights how rapidly sentiment has shifted amid changing global capital flows.
What is confirmed
- Tech stocks trade at 17.1 times forward earnings versus 17.9 for the S&P 500.
- The valuation discount is the first observed since 2017.
- Chip stocks lost nearly 30 percent in five weeks.
- The S&P 500 information technology sector traded at a discount to the broader market.
Still unconfirmed
- The current market signal serves as a precursor to broader economic instability or an extended market downturn.
What to watch next
- Whether chip stocks and artificial intelligence valuations stabilize after the recent multi-week selloff.
- Broader market movements to see if defensive sectors continue to outperform technology shares.
confidence 90%Sources used for this update (20)
- Yahoo Finance — Tech stocks are now cheaper than the S&P 500 for the first time since 2017 — here's what history says comes next: Chart of the Day
- Moomoo — Nvidia, Micron, Intel, Sandisk, Palantir, AppLovin, Qualcomm, and More Stocks That Explain Today's Market -- Barrons.com
- RealMoney Pro — Tech Sector Is Officially Oversold
- MarketWatch — S&P 500, Nasdaq on track for weekly losses despite bouncing Friday
- Quantisnow — Tech falls 7.94% and drags Nasdaq 100 down 6.31%...
- MarketWatch — Big Tech slumps, dragging down S&P 500
- Quantisnow — Tech falls 7.94% and the Nasdaq 100 drops 6.31% as equal weight...
- https://www.dars.gov.et/ — Tech Selloff Drags S&P 500 Down 1.82% as Defensives and Energy Hold Firm - Market Breadth Report
- MarketWatch — Opinion: This market signal called the tech selloff. Now it’s sending another warning.
- Stockhouse — Defensive stocks gain as S&P 500 warning signal persists | 2026-11-06 | Investing News
- FOX2548 & WIProud — Garcia: Dems ready to subpoena Blanche
- https://www.dars.gov.et/ — S&P 500 Slips 0.17% to 7,785.76 as Energy Surge Offsets Tech Drag - Dollar Strength Index
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