Nasdaq is high, but analysts say not to worry about tech bubble
Wednesday, November 27, 2013 11:11 AM
The Nasdaq index, heavy with technology companies, topped 4,000 recently, but analysts say its level is nothing like the tech bubble of 13 years ago, CNNMoney reported.
Yes, the benchmark comes after a string of successful initial public offerings from unprofitable companies like Twitter, but analysts say worry that we're in a tech bubble aren't realistic.
For one thing, the hype in the 2000 dot-com boom was much louder than today's hype.
"There was a 'sky's the limit' mentality in 2000, in terms of revolutionary technology leading to productivity enhancements," Todd Salamone, senior research vice president at Schaefer's Investment Research, said in an interview with CNNMoney. "There was no prediction that was too high. Today there is a lot more hand-wringing, more caution."
Also, today's tech company valuations aren't close to those of 2000. For example, Cisco was trading at 66 times earnings estimates for the coming year, as opposed to a price-earnings ratio of below 12 today.
Meanwhile, investors are heading into the Thanksgiving holiday in a good mood as U.S. stock futures were continuing to edge higher this morning, according to anotherCNNMoney article.
The main indexes in the U.S. have risen by 23 percent to 33 percent so far this year.
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