Scottish Mortgage Trust, one of the London market's proxies for the US’s tech stock giants, had another mixed day even though Goldman Sachs (NYSE:GS) is doing its best to whip up support for the sector.
US tech mega-caps recent blip won’t last, claims the Wall St giant, with the 'big seven' set to resume their market-beating outperformance.
Down 20% from their peak in July the combo of Apple, Alphabet, Microsoft, Nvidia, Amazon, Nvidia and Tesla are now trading on the largest discount to S&P growth multiples since 2017, said the bank.
"As recently as January, the group commanded an 18% PEG premium to the median stock (2.2x vs. 1.9x).
“If consensus growth estimates remain unchanged and the mega-cap tech stocks trade back to their average PEG of the last decade (0.84x), the group would appreciate by 20%," Goldman said.
A catalyst could be the upcoming earnings season adds the bank and, through to 2025, it expects the big seven shares to grow nine percentage points faster than the remainder of the index.
"The divergence between falling valuations and improving fundamentals represents an opportunity for investors," the note said.
SMT shares were down 1% at 664p even so.