Tech valuations are back to pre-AI boom levels
akyuu
129 points
35 comments
April 12, 2026
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Discussion Highlights (7 comments)
sfblah
Must be using some strange definition for tech or valuations, because last I'd heard tech was some huge percentage of the S&P 500, and the index has dropped like 10% from its ATH.
m101
Except they are fundamentally different companies now. Now they have no free cash flow and they are extremely capital intensive industrial businesses. Another note is that this is on forward earnings. What may have just happened is analyst expectations on forward earnings have caught up what markets prices earlier. Forward earnings generally lag pricing, this happens on the way up, and on the way down..
kaycebasques
Aside: why are Alphabet and Meta bucketed into the Communications sector rather than the IT one? Meta kinda makes sense, but Alphabet much less so. Are there any other notable IT companies that aren't actually part of the S&P500 IT sector? Edit: Apparently this happened in 2018 and is known as the de-FAANGing of the IT sector. I.e. FAANG used to all be lumped in a single sector. ^SPX tried to redistribute to spread the companies across different sectors. AMZN is another notable company now outside of IT sector. https://en.wikipedia.org/wiki/Communication_services_sector_...
tamimio
AI isn’t a hype anymore, average non technical people hate AI and would rather not to interact with, and tech companies started to realize that AI won’t be the solution for all of their issues, but they still used it as a scapegoat to lower wages regardless. I even noticed now companies are back to ~2022 time in hiring either FT or consultation, from my experience. So hopefully soon we will have dirt cheap prices for ram and other chips.
outside1234
Someone needs to tell OpenAI and SpaceX that
refulgentis
So no bubble?
Analemma_
$GOOG is 2 or 3 times what it was before the AI boom, depending on when exactly you define "pre-AI boom", so this isn't quite the full story. I tended to think Google was undervalued in the early 2020s and people weren't giving enough credit to how dominant e.g. YouTube was, so maybe it's accurate now and Google won't have as strong an AI correction even if one happens.