Goldman Sachs: Low valuations in tech stocks may present a good entry point for investors

ME News Report, April 7 (UTC+8), Goldman Sachs stated on Tuesday that technology stocks, including U.S. stocks, have become cheap after a long period of underperformance, creating a potential entry point for investors. “This year to date, we have witnessed one of the weakest periods of relative returns for the tech sector in 50 years.” Since 2025, multiple factors have led to a broad weakening of the overall tech sector, prompting investors to shift toward value stocks. These factors include the release of DeepSeek, large-scale capital expenditures by major U.S. corporations, and the disruptive impact of AI-driven software industry. These factors provide opportunities for investors to enter the sector, which still maintains strong growth but with lower valuations. The valuation premium of large U.S. companies has decreased and is now nearly on par with other parts of the sector. Globally, the price-to-earnings ratio of the IT sector has fallen below that of consumer discretionary, consumer staples, and industrial sectors. Goldman Sachs pointed out that despite low valuations, the tech sector’s profitability remains strong. Among the sectors in the S&P 500 index, the market generally expects Q1 earnings per share for the IT sector to grow by 44%, accounting for 87% of the index’s earnings per share growth. (Jin10) (Source: ODAILY)