Goldman Sachs' new report on the stock market bubble reveals what's next for tech companies!:

News Topical, Digital Desk : Amid a steady rise in US tech company stocks, investors were growing increasingly wary of a bubble. However, Goldman Sachs has now stated that there's no need to panic for now. The report states that while tech sector valuations may have risen significantly, they haven't reached historic bubble levels. The report also stated that the current high valuations are due to strong fundamentals, not speculation.

Goldman Sachs makes a major statement on the stock market bubble: Peter Oppenheimer, Chief Global Equity Strategist at Goldman Sachs, stated in his report that technology sector valuations are now stretched,

but they haven't yet reached a level where it could be called a bubble. He acknowledged that investors' expectations need to be tempered, as returns may no longer be as strong as they have been in previous years.

The Nasdaq has surged, but fears are unfounded. According to Bloomberg, the Nasdaq 100 is currently trading at 28 times its forward earnings, compared to a 10-year average of just 23 times. This means that valuations are high, but the reality is that companies' earnings and margins are strong. Speaking to Reuters, Brian Kravetz, President of Scharf Investments, said, "People are certainly afraid of a bubble, but the market is neither overly negative nor in an overly euphoric state like the internet bubble." He added, "If you compare it to the internet era, we haven't reached that level of madness yet, but the path is definitely heading in that direction." According to Goldman Sachs , equity valuations, along with those in the credit and bond markets, are already quite high. This doesn't necessarily constitute a bubble, as these high valuations are the result of strong fundamentals, particularly improved margins and return on equity (RoE). The report states that the real question is whether the US can maintain its RoE premium over other countries in the coming years.

Warning on the Tech Sector: Oppenheimer noted that the concentration of the tech sector in the US stock market has increased significantly, meaning the market has become overly dependent on a few large companies. "This is a result of the success of companies that have become leaders in their sectors, but such high concentration also creates risks for investors," they said.

US economy will face new shocks Goldman Sachs also said that the US economy is currently facing several headwinds that were not there during the previous bull run - high interest rates - persistent inflation - slowing global trade growth - and increasing government expenditure in the US. All these reasons may increase the pressure on the market and investors will have to reduce their expectations regarding returns in the coming months. It is clear that the prices of US tech shares are definitely “expensive” right now, but according to Goldman Sachs, it is not a bubble yet. The company suggests that investors should trust the strong fundamentals, but keep their expectations realistic. That is, the market is hot right now, but not ready to burst.