Tech stock valuations creating ‘significant divergence’ in S&P 500: Strategist


Big Tech stocks the likes of Apple (AAPL), Amazon (AMZN), and Nvidia (NVDA) could be overdue for a correction after continuous growth in the S&P 500. Federated Hermes Chief Equity Strategist Phil Orlando joins Yahoo Finance Live to share his outlook on tech valuations obstructing growth in other sectors.

“Nvidia is sort of the poster child of this imbalance,” Orlando explains, adding: “The stock has gone up by a multiple of five times [since October]. From a valuation perspective. they’re trading at something like 40 times forward revenues and 130 times forward earnings. That, in our view, is excessive, and it’s reminiscent of what the tech stocks did in that fourth quarter of 1999 as we were going into the Y2K calendar changeover.”

Orlando notes valuation shifts could open up opportunities for value and small-cap stocks.

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