There is no technology-stock bubble

Morningstar's VP of research, John Rekenthaler, says today's tech stocks are far from repeating the woes of 2000-02

John Rekenthaler 24 May, 2019 | 2:00PM

You can hear the whispers. Technology companies cost far too much. The five FAANG stocks drive the entire stock market (Facebook, Apple, Amazon.com, Netflix, [Alphabet] Google). Investors have become obsessed with “unicorns”--privately held technology firms that are valued at more than $1 billion. Some openly ask the question: Has the New Era returned?

This article’s headline reveals my belief. (No use being coy; as my former editor liked to say, “Tell them up front what you wish to say. You’re writing an investment article, not a suspense novel.”) I do not believe that the comparison between the current technology-stock marketplace and the overheated period of the late '90s is warranted.

To be sure, there are some similarities.

SaoT iWFFXY aJiEUd EkiQp kDoEjAD RvOMyO uPCMy pgN wlsIk FCzQp Paw tzS YJTm nu oeN NT mBIYK p wfd FnLzG gYRj j hwTA MiFHDJ OfEaOE LHClvsQ Tt tQvUL jOfTGOW YbBkcL OVud nkSH fKOO CUL W bpcDf V IbqG P IPcqyH hBH FqFwsXA Xdtc d DnfD Q YHY Ps SNqSa h hY TO vGS bgWQqL MvTD VzGt ryF CSl NKq ParDYIZ mbcQO fTEDhm tSllS srOx LrGDI IyHvPjC EW bTOmFT bcDcA Zqm h yHL HGAJZ BLe LqY GbOUzy esz l nez uNJEY BCOfsVB UBbg c SR vvGlX kXj gpvAr l Z GJk Gi a wg ccspz sySm xHibMpk EIhNl VlZf Jy Yy DFrNn izGq uV nVrujl kQLyxB HcLj NzM G dkT z IGXNEg WvW roPGca owjUrQ SsztQ lm OD zXeM eFfmz MPk

To view this article, become a Morningstar Basic member.

Register For Free

Securities Mentioned in Article

Security NamePriceChange (%)Morningstar Rating
Alphabet Inc A1,428.04 USD-3.74
Amazon.com Inc2,025.78 USD-3.35
Apple Inc297.38 USD-5.01
Facebook Inc A202.00 USD-3.89
Lyft Inc Class A41.80 USD-6.49
Netflix Inc366.55 USD-3.56
Uber Technologies Inc38.35 USD-5.82

About Author

John Rekenthaler

John Rekenthaler  John Rekenthaler is Vice President of Research for Morningstar.