Analysis: US Tech Stocks are at their lowest valuation relative to the overall market in 7 years, with only a 4% premium over the S&P 500

March 29: The Kobeissi Letter said in a market analysis that U.S. tech stocks have entered a relatively undervalued range. The forward price-to-earnings (P/E) ratio of the S&P 500 Information Technology Index is now just 4% higher than that of the S&P 500 Index—the lowest level since January 2019. This premium has fallen 32 percentage points since October 2025, marking one of the largest discounts on record. In short, U.S. tech stocks are currently at their cheapest level relative to the broader market in seven years. By contrast, at the peak of tech overvaluation in June 2024, the sector was roughly 47% more expensive than the S&P 500. Tech stocks are now on track to trade at a discount to the S&P 500 for the first time since 2017. The Kobeissi Letter suggests it may be time to buy tech stocks. BlockBeats Note: Current market data shows the S&P 500 Information Technology Index’s forward P/E still hovers around 20x, while the broader S&P 500’s forward P/E is roughly 20–21x—both in a relatively low valuation range in recent years. Historically, when tech’s relative valuation has dropped sharply, subsequent performance divergence often follows. Whether tech stocks are “worth buying” still depends on a comprehensive assessment of the macro environment, corporate earnings growth, interest rate trends, and other factors.