Tech Outside of the US

Vinay Tolia |
Categories
Weekly Market Commentary

How expensive is US tech right now?

The Nasdaq 100 trades at 33x earnings — near its 92nd percentile of the last decade. The broad Chinese market? Sitting near its 10-year average at 10x.

QQQ 33x (92nd percentile) vs FXI 10x (near average) — valuation comparison and 1-year performance chart

As we highlighted in Volatility Pulse, the Mag 7 trade appears to be unwinding — every name is below its 200-day moving average for the first time since 2022. QQQ valuations sit in the 92nd percentile of their 10-year range. For those looking to diversify away from US tech concentration, China internet may be worth a look — similar business models (e-commerce, search, social, cloud) at a fraction of the multiple. DeepSeek recently showed these companies can compete on AI at a lower cost.

Ways To Express This View

Growth: 4 YR / KWEB / point to point / 20% Buffer

Snowball: 4 YR 12MNC / KWEB / 70 % EKI / 12-15% P.A

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