Katie Lance
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Katie Lance in Economics & Politics,

One giant reason why tech bubble talk may simply be overblown

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Pop goes the tech bubble talk?

So much for dull Apple results. Shares of the Cupertino, Calif. company are ready to bust higher this morning, taking the rest of the market along for the ride (Dow 22,000, anyone?). That’s after Apple cooled fevered brows over iPhone sales. Who’s afraid of this market? To be sure, fear has been riding shotgun alongside the postelection rally, with specific worries aimed at the strength of big techs like Facebook FB, -0.21%  , Amazon AMZN, -0.01%  , Netflix NFLX, -0.64%   and Alphabet’s GoogleGOOGL, -0.32%  . They’re too dominant, too expensive — Netflix’s forward price/earnings ratio stands at 155.4 times — and look bubbly, complain some. But ahead of what looks like another tide-lifts-all-boats day for this group, our call of the day, from Jefferies‘s Sean Darby, takes another swat at that bubble talk. He doesn’t see the tech sector as overvalued, even if broader markets are hitting new highs. On most conventional measures, the tech majors aren’t even expensive, the Jefferies chief global equity strategist tells clients in a note Wednesday. He explains: “In our view, many of the constituents have either joined an oligopoly (semiconductors) or have achieved monopolistic models that allow for ‘increasing returns to scale’ (internet/media).”

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