After tumbling hard in February, the magnificent seven group of tech stocks have rebounded lately.
Might the worst be over for Big Tech? Investors must hope so.
Between November and February, all seven lagged the Standards and Poor’s (S&P) 500, notes the Man Group – the first time in over two years that none of the seven (Apple, Microsoft, Nvidia, Amazon, Alphabet, Meta, and Tesla) outperformed the index over a three-month period.
On the bright side, valuations are the most reasonable in almost two years, says Barclays.
The mag seven remain pricier than their 20-year average, says Citi, although that is even more true of the S&P 500.
In other words, while Big Tech still trades above long-term norms, the rest of the S&P 500 has become even more expensive by comparison.
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Still, while cheaper, Man Group notes the seven recently traded at an average of 26 times estimated earnings, compared to 19 at market lows in 2018 and 2022.
That leaves room for further downside if the market mood turns sour again.
