• The tech stock boom is not like the tech bubble of the late 1990s.
• Volatility among tech stocks is near record lows.
• Tech disruption in retail may still be in its early stages.
Technology stocks have produced some of the largest equity market returns in 2017. Can they keep up their rally in 2018? Here are five things to consider about the tech industry as we head into 2018.
1. Tech Stock Valuations Are in Line With Fundamentals
The rally in technology stocks in recent years has led some investors to grow concerned that there may be a bubble forming in the sector. However, looking at the information technology sector’s market capitalization and profits as a percentage of the broader S&P 500, valuations are much more in line with profits this time around. Cash-heavy balance sheets, more modest valuations and a “winner-takes-most” environment also suggest that this tech rally may be different.