U.S. Tech Stocks Adjust 11% from June Highs; Forward PE Falls from 32x to 22x

According to Keith Lerner, Chief Investment Officer of Truist, cited by Yahoo Finance on July 27, U.S. technology stocks have corrected 11% from their early June peak. Lerner noted this marks the fifth double-digit correction during the current bull market, but is the shallowest and most gradual compared to the previous four.

The forward price-to-earnings ratio for tech stocks declined from 32x in October last year to 22x, representing a 30% revaluation. Additionally, the valuation premium of tech stocks relative to the S&P 500 index narrowed to 13%, down significantly from nearly 50% at the peak of the bull market. Despite market concerns about excessive valuations in the AI-driven rally, tech stock earnings estimates continue to exceed market averages.