On March 29, The Kobeissi Letter released a market analysis indicating that U.S. tech stocks have entered a relatively undervalued range. According to BlockBeats, the forward price-to-earnings (P/E) ratio of the S&P 500 Information Technology Index is currently only 4% higher than the S&P 500 Index, marking the lowest premium since January 2019. This premium has decreased by 32 percentage points since October 2025, representing one of the largest recorded discounts.
In summary, U.S. tech stocks are 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 now moving towards being more undervalued than the S&P 500 for the first time since 2017. The Kobeissi Letter suggests that it might be time to consider investing in tech stocks.
BlockBeats notes that based on current market data, the forward P/E of the S&P 500 Information Technology Index remains around 20 times, while the overall S&P 500 forward P/E is approximately 20 to 21 times, indicating a relatively low valuation range in recent years. Historically, when tech stocks experience significant relative valuation declines, subsequent performance tends to vary. However, whether they are "worth buying" requires a comprehensive assessment of macroeconomic conditions, corporate earnings growth, and interest rate trends.