Tech multiple expansions

Nasdaq 100 is now up 24% since mid-October last year. The remarkable thing about this move is that it is driven exclusively by multiple expansion while earnings for the index are slightly down over the period. In other words, the 12 months forward PER of the tech-heavy Nasdaq 100 is now 27.2 times, 1/3 more expensive than 6 months ago. It may be driven by AI, a technical rebound after 2022 or the defensive qualities of tech in a slowing economic environment, at ECP we still find the higher valuations somewhat staggering and fragile in today’s period of higher interest rates. Our portfolios trade at much lower valuations.