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While valuations have been a concern for technology investors, particularly with big name stocks such as Apple Inc. (NASDAQ:AAPL) and Facebook Inc. (NASDAQ:FB), data suggest the technology sector is not as stretched on valuation as some investors believe it to be.
“Even though tech has outperformed the S&P 500 Index by more than 8% year to date, its valuations are not stretched relative to the broad market and nowhere near the levels reached at the peak of the dot-com bubble, notes SSgA. “Tech sector relative valuations to the broader market based on price-to-earnings and Enterprise Value (EV)-to-EBITDA are 15% and 7% below their historical median, respectively.”
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Tom Lydon’s clients own shares of Apple and Facebook.