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Quarter-End Insights

Tech: Overvalued Overall, but Opportunities Remain

Valuations in general are painting overly rosy scenarios, but we still see pockets of value in areas such as enterprise software and IT services.

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  • Overall, we view the tech sector as slightly overvalued at a market cap weighted price/fair value of 1.06.
  • We see a tectonic shift toward enterprise cloud computing.
  • The  Intel (INTC) and  Mobileye (MBLY) merger highlights the fight for automotive chip leadership, although valuations in semis more than exceed the hype.

 

Brian Colello does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.