Technology / Semiconductor / Internet Research

Nicolas Baratte

Nicolas Baratte has been a financial analyst since 2000, covering the Semiconductor sector and Global Technology. Nicolas has worked on the sell-side for JPMorgan, CLSA. On the buy-side for a Tiger fund and Prudential. Nicolas has covered semiconductors, Asian hardware and components, and the Global Tech supply chain. Nicolas lives mostly in Taiwan, sometimes in France and is in New York regularly.

Thematic (Sector/Industry)

United states It / Thematic (Sector/Industry)

<ul>
<li>US Index is trading at 22x forward earnings. Average since 2014 is 18.9x. Historical comparisons are misleading because market composition has changed drastically. </li>
<li>Tech grows 2.5x faster than non-Tech, generates margins 2.5x higher, ROE 2x higher. As Tech grows faster with higher profitability, it lifts up the overall market. Valuations reflect that.</li>
<li>Is 22x forward earnings too high? Price to Book compared to Return on Equity does not look expensive. The market is getting more expensive because profitability (ROE) is increasing.</li>
</ul>


US Index is trading at 22x forward earnings. Average since 2014 is 18.9x. Historical comparisons are misleading because market composition has changed drastically. 
Tech grows 2.5x faster than non-Tech, generates margins 2.5x higher, ROE 2x higher. As Tech grows faster with higher profitability, it lifts up the overall market. Valuations reflect that.
Is 22x forward earnings too high? Price to Book compared to Return on Equity does not look expensive. The market is getting more expensive because profitability (ROE) is increasing.


US Valuations: A Bit High. Non-Tech Is More Expensive than Tech. '26-27 Expectations Too High?