Investors shift money away from expensive technology stocks to other sectors

Technology stocks in the United States have reached their most expensive valuations since 2007, pushing many investors to move their money into other sectors. The S&P 500 index has climbed more than 90% over the past three years, with companies like Nvidia and Alphabet responsible for much of that growth. Tech stocks alone produced 53% of the index's total returns in 2025.

Financial advisers are now telling clients to reduce their exposure to technology and buy shares in industries such as healthcare and manufacturing instead. One reason for this caution is that AI-related spending now consumes around 75% of tech companies' available cash, a level last seen during the dot-com boom of the late 1990s. The S&P 500's price-to-earnings ratio currently sits at 22 times forecast earnings, close to the record of 24 times set in 2000.