Goldman Sachs: Tech stock valuations are sluggish; IT sector Q1 earnings per share are expected to grow by 44%

Gate News message: On April 7, Goldman Sachs said in a research report released Tuesday that technology stocks, including U.S. equities, have become relatively cheap after a long stretch of poor performance, creating a potential buying opportunity for investors. Goldman Sachs said: “(Year to date), we have witnessed one of the weakest periods in terms of technology sector relative returns in 50 years.” Since 2025, a combination of factors—DeepSeek’s release, large-scale capital expenditures by U.S. mega-cap companies, and the disruptive impact of AI-driven software on the industry—has contributed to the overall technology sector’s relative underperformance, prompting investors to rotate toward value stocks. Currently, the valuation premium for U.S. mega-cap companies has already declined to nearly match that of other parts of the sector. Globally, the IT sector’s price-to-earnings ratio is already lower than that of consumer discretionary, consumer staples, and the industrial sector. Goldman Sachs noted that despite the sluggish valuations, the technology sector’s earnings performance remains strong. Among the S&P 500’s sectors, the market broadly expects IT sector Q1 earnings per share to grow 44%, accounting for 87% of the index’s earnings per share growth.