Tech confronts reality: Are US tech stocks still overvalued?
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Good companies, and good valuation
The Russia-Ukraine war has taken the world by storm, and has also shaken markets across the world. It's a reminder to all of us that anything can happen in this world, and these things affect lives, markets, and also the value of our investments.
However, we need to remember that a good company is not necessarily at a good valuation, and both are required to make a good investment. For example, $NVIDIA(NVDA.US)$ trades at a forecasted 12-month forward PEG ratio of about 2.91 according to Nasdaq.com. Generally, A PEG ratio above 1 is considered to be overvalued, even after pricing in potential growth in the company's earnings. As such, one may need to reevaluate if an investment in such a company is a worthwhile one.
Nothing to fear though! We can always sell puts, or simply search for another company with better valuation. The future is bright for tech! The valuation just needs to be accurately reflective of the company's future potential.
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