Much of the recent pull-back in the US stock market appears to have reflected a concern that valuations in the technology sector are frothy. But we are a long way from the situation that prevailed at the peak of the dot com bubble. In March 2000 – the month in which technology shares peaked – the price/estimated operating earnings ratio of the S&P 500 biotech index was 46, more than twice its level of 20 or so today. And the valuation of the information technology sector on this metric was nearly four times as high.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to gain:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services