Buzz in the market: Are IT sector valuations in bubble zone?
The returns on stocks of information technology companies have been so good that investors may be wondering if the sector is in bubble territory. Most IT stocks have managed to maintain sales and profitability despite the coronavirus pandemic. The sector is perhaps over-valued but it is less over-valued than the broad market, writes Devangshu Datta. Stocks of information technology (IT) companies have outperformed the market in 2020. Indeed, it is one of the few sectors to generate excellent returns despite, or perhaps because of, the pandemic. Indeed, the returns have been so good that investors may be wondering if the sector is now in bubble territory.