Is this dotcom bubble 2.0? asks Robin Pagnamenta in The Daily Telegraph. Almost 20 years after the dotcom crash tech stocks have once again reached dizzying heights. Apple and Microsoft are now worth a combined $2.8trn. That is more than Great Britain’s entire annual GDP. Yet where the dotcom bubble was marked by the overvaluation of “flimsy” start-ups, today’s tech giants are “mature companies which earn real money”.
Just five stocks – Facebook, Apple, Amazon, Microsoft and Google-owner Alphabet – account for nearly a fifth of the S&P 500’s total market value, notes Akane Otani in The Wall Street Journal. That is the highest level since the dotcom bubble peaked. Yet today’s valuations are far less stretched: the five leading lights of the dotcom boom traded on 47 times expected earnings, against 30 today. The tech firms also enjoy much more resilient earnings this time.
In 2018 it was fashionable to talk of a coming “techlash” against Silicon Valley from consumers and regulators, says The Economist. Yet what followed was a “jaw-dropping bull run”: shares in the five biggest US tech firms are up 52% over the past 12 months. Yet perhaps more disturbing than talk of a new bubble is the possibility that we are not in a bubble and that the tech giants really are destined to disrupt and control ever more sectors of the economy. The bigger they grow, the bigger the risk of an almighty political backlash.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
-
Christmas at Chatsworth: review of The Cavendish Hotel at BaslowMoneyWeek Travel Matthew Partridge gets into the festive spirit at The Cavendish Hotel at Baslow and the Christmas market at Chatsworth
-
Tycoon Truong My Lan on death row over world’s biggest bank fraudProperty tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
-
Halifax: House price slump continues as prices slide for the sixth consecutive monthUK house prices fell again in September as buyers returned, but the slowdown was not as fast as anticipated, latest Halifax data shows. Where are house prices falling the most?
-
Rents hit a record high - but is the opportunity for buy-to-let investors still strong?UK rent prices have hit a record high with the average hitting over £1,200 a month says Rightmove. Are there still opportunities in buy-to-let?
-
Pension savers turn to gold investmentsInvestors are racing to buy gold to protect their pensions from a stock market correction and high inflation, experts say
-
Where to find the best returns from student accommodationStudent accommodation can be a lucrative investment if you know where to look.
-
Best investing appsLooking for an easy-to-use app to help you start investing, keep track of your portfolio or make trades on the go? We round up the best investing apps
-
The world’s best bargain stocksSearching for bargain stocks with Alec Cutler of the Orbis Global Balanced Fund, who tells Andrew Van Sickle which sectors are being overlooked.
-
Revealed: the cheapest cities to own a home in BritainNew research reveals the cheapest cities to own a home, taking account of mortgage payments, utility bills and council tax
-
UK recession: How to protect your portfolioAs the UK recession is confirmed, we look at ways to protect your wealth.
