There is a lot of talk of tech stocks being “overvalued”, so investors should avoid them, but how do we know whether they are really overvalued?

I believe that there are ways to look for undervalued tech stocks. I describe my approach here: https://attendshortly.com/2020/12/31/guide-to-i..., which is inspired by Nicholas Nassim Taleb (author of Black Swan)'s barbell strategy to investing.​​​

Hi there

Idk but these days, words like “overvalued, bubble” are thrown around too much when tech stocks surge in price until they lose meaning. Different people have such differing opinions on the company’s growth rate, TAM, making them value tech stocks differently, and when the price exceeds their targets, they go on CNBC or yahoo finance and cry overvalued

Multiples and financials of the company could tell u whether there is overvaluation. An example would be EV/S, has this company’s EV/S ratio surged in these few months? This tells u if the market is paying more for a certain amount of earnings. Valuations may be stretched, but it does not necessarily mean overvalued, as investors also give companies with higher growth and margins, higher multiples. Macro conditions also matter, as in a low interest rate environment, cheap money could finance the development of growing companies more than already matured companies (which tend to be yr “value” stocks)

As YJ mentioned, short term technicals may also greatly influence price and therefore valuation. When stocks breakout from resistance, momentum may drive prices higher until next resistance is hit, so that may give u indication of overvaluation

Valuation is a fairly tricky thing, comes with experience and even veteran investors will misprice or get it wrong from time to time.

Buying and holding gd companies for the long term may be the simplest and easiest way for most investors, valuations may matter in short term, but the stock price will ultimately follow the company’s earnings, therefore the quote of ”short term is voting machine, long term is weighing machine”