Tech Stocks P/E Ratios

Didn't Amazon and Tesla had historic P/E ratios above 700?

Remember in P/E the E is earnings, not revenue. Their P/E is probably astronomical. The only thing that suggests P/E isn't an accurate indicator for them is massive growth. Nobody can really say what E will be when the growth slows or stops. Nor do we know when it will.

Actually, price / earnings (P/E ratio) is typically 10-20 for _any_ company in the S&P 500. When you look at big tech, the numbers are drastically higher:- AMZN: 92- GOOG: 34- FB: 33- NFLX: 76- AAPL: 35- MSFT: 35Compare this to, say, 3M, at 19, or GM with 17.edit: incidentally, apparently Zoom's P/E is... 527, which is grossly inflated even for a tech company. Tesla is also in the same category with a P/E of 834.

P/E is under 20 is the norm, not the exception. Even companies like meta, apple etc. had pe near 10 for long time.

Their P/E ratio is just 13.26, while Microsoft's is 16.05 and Google is 21.38. While P/E is just one simplistic measure, it does seem to indicate that their stock price already assumes lower future earnings relative to other mature tech companies.

PE is price to earning, but if you look at earnings when is very low(barely making a profit), the number will be very high. So people tend to project the Earnings a year or so, and it would fall drastically.

P/E is meaningless because it doesn't normalize to the number of shares. What you want is the price to sales ratio, which normalizes for market cap. And yeah, tech stocks are ridiculously overinflated compared to every other sector of the economy. Facebook ranks #3 in P/S ratio even in the tech industry.So yeah, it's an absurd market valuation based on speculation of growth.

not true, amazon can always dump costs. P/E is meaningless beyond a certain ratio, at that point it just indicates that the business is growth oriented and reinvesting its profits

The market is pricing in those tea leaves. Look at the P/E ratios of Nvidia (95) and Facebook (31) vs Apple (29) and Google (25).

P/E ratios of Google, Apple, Microsoft are all in the 25-30 range, which is not abnormally high. Amazon's P/E has always been wonky because it rarely posts high profits. Nvidia is the current outlier, and I think everyone is in agreement that it is entirely fueled by AI hype.