Time to buy tech?
Technology valuations have meaningfully declined over the past year, but the sector continues to stand out for its strong earnings growth and relative resilience. While near-term uncertainty remains, tech still appears well positioned as a key driver of broader market growth.
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Published on 13 April 2026
Is it time to buy tech?
The sector has broadly declined over the last six months, driving valuations to multi-year lows that are nearly in line with those of the S&P 500. The price-to-earnings ratio of the technology sector has fallen from 32x to a low of 20x, and now stands at 22x.
At the same time, the technology sector continues to post some of the strongest earnings growth among all S&P 500 sectors. The sector is expected to deliver 37% earnings growth in 2026 compared to18% for the entire index. Outside of software, which has sold off on concerns about artificial intelligence, tech stocks have remained resilient. The sector has even outperformed since the war with Iran began and is now 4.4% higher compared to the S&P 500’s 0.1%.
While further downside in technology is possible, valuations have adjusted significantly, suggesting the worst of the sell-off may be behind us. The near-term outlook is clouded by geopolitics, but we don’t consider tech much riskier than the broader market, and we expect the sector will remain a primary source of growth.
916855 Exp : 13 April 2027
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Small caps have outperformed this year despite the threat of higher interest rates, suggesting the rally is being driven by more than just diversification away from large cap tech stocks. Improving earnings expectations and a resilient U.S. economy support our view that small caps have further upside from here.
Signs from sales
Signs from Sales
Year-to-date stock market returns have been driven by robust earnings growth. But when assessing the equity outlook, it’s important to ask what’s supporting the strong earnings trend.
The S&P 500’s history shows that despite recessions, wars, inflation, and corrections, the market’s long-term trajectory has remained upward. As the U.S. marks 250 years of resilience, the lesson for investors is clear: wealth is built through patience, discipline and staying invested.
U.S. policy uncertainty has remained elevated and consumer sentiment has weakened. Even so, the economy has stayed resilient, and because growth has held up better than sentiment and headlines suggest, we continue to forecast 2% U.S. growth in 2026, in line with trend.
