Big Tech Stocks Like The Magnificent 7 Suddenly Look Cheap

This article written by Phil Rosen, co-founder and editor of Opening Bell Daily, was originally published on Inc.com.

You can’t blame the Magnificent 7 for a pricey stock market anymore.

For years, investors pointed to Big Tech as the reason for the S&P 500’s premium valuation, but the data now tell a different story.

As it turns out, technology is just one of two sectors—alongside real estate—trading below historical norms.

According to DataTrek Research, all other S&P 500 sectors remain above their five-year average valuation, with the benchmark itself trading at a six percent premium against its recent history.

Technology, meanwhile, currently hovers at a 9.3 percent discount against its last five years.

In other words, the market’s most frothy valuations have spread well beyond Silicon Valley.

The sector that takes the most criticism for driving froth and bubbles is actually cheaper than the rest of the market. 

Elevated multiples have instead rotated elsewhere.

Industrials, communications services, consumer discretionary and consumer staples all trade above their five-year averages, DataTrek’s report shows.

Commodity sectors like energy and materials, too, command richer valuations than just a few years ago.

The wrinkle here is that even as valuations remain elevated, analysts have started to trim earnings expectations for the start of 2026.

Revenue forecasts, though, have actually climbed across most sectors. 

That combination implies companies anticipate steady demand but rising costs, which could ultimately compress profit margins. To put it plainly, the market—even with cheap Big Tech—is still relatively expensive even as near-term expectations deteriorate.

All images via Inc.com.