Value in Tech

Vinay Tolia |
Categories
Weekly Market Commentary

Big Tech Bargain?

The Nasdaq 100’s valuation spread to the S&P 500 has compressed to its lowest level since 2018 (Bloomberg, as of 4/2/2026). The last time this spread contracted this much, NDX outperformed SPX by the widest margin in the following 12 months. Tech is now trading at half its historical EV/Sales multiple — 2.1x vs a 4.5x long-term average (Bloomberg, as of 4/9/2026).

Bloomberg chart showing Nasdaq 100 to S&P 500 valuation spread at lowest since 2018, plus Magnificent 7 drawdown table — data as of 4/14/2026

As we highlighted in Volatility Pulse, the sector that was untouchably expensive is now cheaper than it was pre-2020. Goldman Sachs’ global equity strategy team calls this a valuation window not seen in 50 years — tech’s PEG ratio has fallen below the global market for the first time since the early 1970s (Goldman Sachs Research, Apr 2026). For some investors, this type of valuation reset may present an interesting re-entry point with structural protection.

Ways To Express This View

Growth: 4 YR / NDX & NDXT (Equal Weight) WoF / ~117% Participation / 70% EKI

Snowball: 3 YR / NDX & NDXT (Equal Weight) WoF / 70% EKI / 100% Call Threshold / Annual Call / ~13.6% P.A.

*Indicative terms only. Final pricing subject to market conditions at time of trade.

This material is for informational purposes only and does not constitute a recommendation. Data sourced from public sources and has not been independently verified. Past performance is not indicative of future results. Structured notes involve risks including potential loss of principal.