Despite the coronavirus concerns that have hit commodity markets and, in turn, energy and basic materials stocks, U.S. tech stocks have posted strong returns to start the year. This continues their impressive streak from 2019. But are the current tech valuations sustainable?
In a recent market note, Brian Colello, Director of Technology, Media and Telecom Equity Research at Morningstar, noted that the median tech stock was 11% overvalued as of January 30. This was one of the highest price/fair value ratios since 2007, according to Colello. Certain sub-industries within tech are more overvalued than others,