Amidst the ongoing debate over the existence of a tech bubble, analysts like David Kostin from Goldman Sachs are quick to dismiss concerns, declaring, “This time is different.” However, a closer look at key indicators suggests otherwise.
Tech stocks, when measured against GDP, have reached record highs. This surge in valuation is not limited to absolute figures; the ratio of tech stocks to non-tech stocks is also breaking records. The S&P 500’s recent performance, completing a remarkable run of 16 positive weeks out of the last 18, has drawn parallels to historical patterns seen in 1971 and 1964.
Despite optimistic assertions, the echoes of the famous phrase “This time is different” raise skepticism among market observers. The tech sector’s ballooning prominence and the remarkable streak in the S&P 500’s positive performance trigger concerns of a potential bubble.
Investors are left to wonder: Is the current surge in tech stocks truly unprecedented, or are we witnessing a replay of historical patterns that may lead to a correction?
Sources:
No. It isn't different.
Tech stocks to GDP are a record.
Tech stocks to non Tech stocks are a record.
— David Levenson (@levenson_david) March 4, 2024
“The S&P 500 last week completed a run of 16 positive weeks out of the last 18 for first time since 1971. If this carries on for another week it'll be 17 out of 19 for the first time since 1964:” Deutsche Bank’s Jim Reid
— Lisa Abramowicz (@lisaabramowicz1) March 4, 2024