Analysis: U.S. tech stocks are at their lowest valuation relative to the broader market in 7 years.

Golden Finance reports that on March 29, The Kobeissi Letter released a market analysis indicating that U.S. tech stocks have entered a relatively undervalued range. The forward price-to-earnings ratio (P/E) of the S&P 500 Information Technology Index is currently only 4% higher than that of the S&P 500 Index, marking the lowest level since January 2019. This premium has dropped by 32 percentage points since October 2025, creating 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. In contrast, during the peak of tech stock overvaluation in June 2024, the tech sector was approximately 47% more expensive than the S&P 500. Tech stocks are currently trending towards being undervalued compared to the S&P 500 for the first time since 2017. The Kobeissi Letter suggests that it may be time to buy tech stocks.
Note: Based on current market data, the forward P/E of the S&P 500 Information Technology Index is still around 20 times, while the overall S&P 500’s forward P/E is about 20 to 21 times, placing it in a relatively low valuation range in recent years. Historically, when tech stocks’ relative valuations have significantly declined, there tends to be subsequent performance divergence; however, whether it is “worth buying” still requires a comprehensive assessment considering macroeconomic conditions, corporate earnings growth, interest rate trends, and other factors.