Tech stocks hit lowest valuations since OpenAI launched ChatGPT

The AI trade that defined markets for nearly four years has fully unwound, at least on paper. The S&P Global tech sector now trades at 21x forward earnings, a level last seen before ChatGPT debuted on November 30, 2022, according to Truist analyst Sam Grelck. That’s a steep fall from 32x forward P/E in October 2025, representing a roughly 34% compression in how much investors are willing to pay per dollar of expected earnings. The paradox: earnings are actually rising What makes this selloff unusual is that it’s happening against a backdrop of improving fundamentals. Forward earnings estimates for the tech sector have climbed 19% over the past three months alone. That growth rate nearly doubles the next strongest sector. Semiconductors tell a similar story. The PHLX Semiconductor Index, the benchmark for chipmakers, sits at roughly 20x forward P/E. That mirrors where it traded in January 2023, well before the AI infrastructure buildout kicked into high gear. For context, the SOX peaked at 30x forward earnings in mid-2024, meaning chip stocks have shed a third of their premium valuation. Capital expenditures among hyperscalers and semiconductor manufacturers remain robust. Reven...