US Outlook: Tech Stocks Pricey, Retailers Too Cheap

Morningstar equity analysts believe the US tech sector is overvalued, but there are investment opportunities in retail stocks unfairly punished by the market

Brian Colello, CPA 4 January, 2018 | 3:07PM Jaime M. Katz, CFA
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Morningstar equity analysts believe the US technology sector is now overvalued after stunning gains in recent years. We believe valuations across tech are painting overly optimistic scenarios for new and emerging technologies around artificial intelligence. 

Tech bellwethers Apple (APPL), Facebook (FB) and Intel (INTC) all appear modestly overvalued to us. Google parent company Alphabet (GOOG) appears fairly valued.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
Alphabet Inc A2,786.17 USD1.35Rating
Alphabet Inc Class C2,793.44 USD0.65Rating
Amazon.com Inc3,376.07 USD1.68Rating
Apple Inc149.32 USD0.46Rating
Carnival Corp21.82 USD-1.04Rating
Coca-Cola Co54.47 USD0.44Rating
Facebook Inc A315.81 USD-3.92Rating
Intel Corp48.28 USD-2.29Rating
Kellogg Co61.60 USD-0.21Rating
Microsoft Corp310.11 USD0.64Rating
Procter & Gamble Co142.85 USD1.42Rating
Royal Caribbean Group84.42 USD-0.58Rating
The Kraft Heinz Co36.44 USD0.61Rating

About Author

Brian Colello, CPA  is a senior stock analyst with Morningstar.