[HN Gopher] Tech valuations are back to pre-AI boom levels
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       Tech valuations are back to pre-AI boom levels
        
       Author : akyuu
       Score  : 36 points
       Date   : 2026-04-12 22:13 UTC (47 minutes ago)
        
 (HTM) web link (www.apollo.com)
 (TXT) w3m dump (www.apollo.com)
        
       | sfblah wrote:
       | Must be using some strange definition for tech or valuations,
       | because last I'd heard tech was some huge percentage of the S&P
       | 500, and the index has dropped like 10% from its ATH.
        
         | jjmarr wrote:
         | The definition is the first sentence of the post:
         | 
         | > The chart below compares the forward P/E ratios for the S&P
         | 500 and the S&P 500 Information Technology sector.
         | 
         | > Tech valuations have compressed from 40x to 20x, and we are
         | back at levels last seen before the AI boom began
         | 
         | Forward PE is the ratio of stock price to anticipated earnings.
         | 
         | If it's higher, then investors are predicting future growth in
         | a company.
        
       | m101 wrote:
       | Except they are fundamentally different companies now. Now they
       | have no free cash flow and they are extremely capital intensive
       | industrial businesses.
       | 
       | Another note is that this is on forward earnings. What may have
       | just happened is analyst expectations on forward earnings have
       | caught up what markets prices earlier. Forward earnings generally
       | lag pricing, this happens on the way up, and on the way down..
        
       | kaycebasques wrote:
       | Aside: why are Alphabet and Meta bucketed into the Communications
       | sector rather than the IT one? Meta kinda makes sense, but
       | Alphabet much less so.
       | 
       | Are there any other notable IT companies that aren't actually
       | part of the S&P500 IT sector?
        
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       (page generated 2026-04-12 23:00 UTC)