The hottest stocks in the market have kept on defying gravity. Some still have fundamentals pointing to long-term gains, but it’s a good time to take profits on many others. Valuations across pockets of the market sit at levels that seemed unimaginable just 18 months ago, with the average Nasdaq-100 Index ($IUXX) price-earnings ratio sitting close to 2021 peak levels.
History says that tech valuations will eventually come down to the historical median of around 20 times earnings. It is tough to say when, but a few high-profile stumbles could be all it takes to remind everyone that gravity still works.
