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Why it s never been cheaper for investors to snap up US tech giants
Facebook and Amazon shares are trading at their cheapest-ever levels relative to the S&P 500
10 February 2021 • 6:00am
Tech stocks have soared in the pandemic but far from becoming prohibitively expensive, the explosive earnings growth delivered by the world s biggest technology companies means their shares have never been cheaper.
Shares in social media giant Facebook and e-commerce behemoth Amazon are now trading at their cheapest-ever levels relative to the S&P 500, the index of the largest American companies, according to Peter Bourbeau, of asset manager Clearbridge Investments.
Mr Borbeau pointed to their price-to-earnings (p/e) ratios, a measure of how many multiples of a company s profits their shares cost. Facebook s p/e ratio of 26 is lower than the 27 average across companies in the S&P 500, while Amazon s, although nearly three times higher at 79, has fallen to its lowest-ever premium over th