MW These 20 stocks in the now-cheap tech sector are positioned for the fastest growth through 2028
By Philip van Doorn
The S&P 500 information-technology sector's forward P/E ratio is lowest relative to five-year averages among all sectors in the index
These are three of the largest tech companies for which the stocks' forward price/earnings valuations have declined significantly in 2026.
The S&P 500 has been getting cheaper on a forward price/earnings basis, and enthusiasm has been building among money managers and analysts.
Here is recent coverage of bullish calls in MarketWatch's Need to Know column, which you can have waiting in your inbox each morning if you sign up for it here.
-- Why two Wall Street titans just turned bullish on U.S. stocks
-- Why 'Rule of 10' stocks like Nvidia and Meta are now poised for a comeback, according to Goldman Sachs
-- An earnings boom is around the corner, and it could blindside stock-market bears
A stock's forward price/earnings ratio is its price divided by the consensus 12-month earnings-per-share estimate among analysts working for brokerage and research firms. These estimates are weighted by companies' market capitalization for the S&P 500 SPX and the index's 11 sectors.
The S&P 500's forward P/E ratio has declined to 19.4 from 22.5 at the end of 2025, according to LSEG. But the index has increased 0.6% this year through Monday, excluding dividends. This means the decline in the forward P/E has been driven by increases in rolling 12-month EPS estimates.
Here is a roundup of the 11 sectors of the S&P 500, sorted by their current forward P/E valuations relative to their Dec. 31 valuations, with the full index at the bottom of the list:
Sector or index Current forward P/E to that at Dec. 31 Forward P/E 5-year avg. forward P/E 10-year avg. forward P/E 2026 price change
Information technology 75% 20.0 25.6 22.6 -1.4%
Consumer discretionary 84% 25.1 26.3 24.6 -3.8%
Financial services 85% 14.1 14.5 13.8 -5.7%
Communication services 88% 19.6 18.5 17.2 0.5%
Healthcare 92% 17.0 17.2 16.4 -4.4%
Materials 97% 18.7 17.8 17.7 14.7%
Industrials 99% 24.0 20.7 19.3 11.4%
Real estate 99% 34.9 38.9 40.4 7.4%
Utilities 104% 18.6 18.1 18.0 8.7%
Consumer staples 104% 21.8 20.6 20.0 6.5%
Energy 121% 18.9 12.7 22.2 27.5%
S&P 500 86% 19.4 20.0 19.0 0.6%
Source: LSEG
Forward P/E ratios have declined for all but three of the sectors this year. The information technology sector is trading at only 75% of its Dec. 31 forward P/E valuation, even though the sector has declined by only 1.4% this year. The IT sector's forward P/E is also well below its five-year and 10-year average forward P/E valuations.
While the IT sector as a whole has held up this year, there are plenty of stocks within it that have fallen hard. For example, Oracle's $(ORCL)$ P/E has declined to 19.6 from 25.2 at the end of 2025. Its share price is down 20% this year, while its rolling 12-month consensus EPS estimate has increased 3%.
On the other hand, Nvidia's (NVDA) P/E forward P/E has declined to 20.8 from 24.5, while its share price has risen 1.5% and its rolling 12-month consensus EPS estimate has increased by 19.5%.
Looking further ahead - screening the IT sector
With the IT sector's valuation falling so much this year, you might be interested in a broad play, such as the State Street Technology Select Sector SPDR ETF XLK, which tracks the S&P 500's IT sector by holding all 73 of its stocks.
Keep in mind that even a broad investment in the full S&P 500 is tech-heavy. The portfolio of the SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 by holding all of its stocks weighted by market capitalization, has a 19% concentration to three tech-sector companies: Nvidia, Apple $(AAPL)$ and Microsoft $(MSFT)$.
To screen individual stocks within the S&P 500 IT sector, we will look at projected compound revenue growth rates (CAGR) from 2026 through 2028. Consensus sales estimates are available through 2028 for 69 companies in the sector. These are mean estimates among analysts polled by LSEG, adjusted by the data provided to match calendar years for companies, such as Nvidia, whose fiscal reporting periods don't match the calendar.
We are also comparing the companies' forward P/E ratios to those as of Dec. 31 and showing year-to-date changes in the P and the E.
Among the 69 companies, these 20 have the highest projected sales CAGR from calendar 2026 through calendar 2028:
Company Two-year est. sales CAGR through 2028 Forward P/E Forward P/E as of Dec. 31 2026 price change Increase in rolling 12-month EPS estimate 5-year avg. forward P/E Palantir Technologies 42.4% 87.1 173.1 -25.5% 48.0% 97.3 Oracle 42.1% 19.6 25.2 -20.2% 2.7% 19.7 Broadcom 35.5% 25.7 31.9 9.7% 36.0% 22.9 Advanced Micro Devices 34.8% 29.5 33.1 15.3% 29.2% 32.5 AppLovin 27.0% 23.6 45.5 -38.0% 19.5% 50.5 Nvidia 25.4% 20.8 24.5 1.5% 19.5% 37.2 Arista Networks 22.1% 39.7 38.6 16.0% 12.8% 33.5 CrowdStrike Holdings 21.7% 77.4 99.1 -14.2% 9.8% 204.8 Seagate Technology Holdings 20.5% 26.5 20.5 86.4% 44.0% 38.9 Western Digital 20.5% 26.1 19.6 103.3% 52.3% 17.1 Datadog 19.4% 46.4 56.9 -19.1% -0.7% 195.0 ServiceNow 18.6% 19.8 37.1 -41.9% 8.9% 57.6 Teradyne 18.2% 53.3 36.7 91.2% 31.8% 32.5 Ciena 17.6% 66.6 41.7 105.2% 28.4% 29.7 Monolithic Power Systems 16.7% 59.2 43.8 51.4% 12.0% 48.0 Microsoft 16.6% 20.6 27.4 -20.5% 6.1% 30.6 Microchip Technology 15.8% 26.7 28.8 15.4% 24.6% 24.3 Palo Alto Networks 14.3% 41.7 45.3 -11.8% -4.4% 57.3 Lam Research 14.2% 38.3 32.1 56.2% 30.8% 25.8 Fair Isaac 13.1% 20.3 38.9 -40.8% 13.4% 41.2
MW These 20 stocks in the now-cheap tech sector are positioned for the fastest growth through 2028
By Philip van Doorn
The S&P 500 information-technology sector's forward P/E ratio is lowest relative to five-year averages among all sectors in the index
These are three of the largest tech companies for which the stocks' forward price/earnings valuations have declined significantly in 2026.
The S&P 500 has been getting cheaper on a forward price/earnings basis, and enthusiasm has been building among money managers and analysts.
Here is recent coverage of bullish calls in MarketWatch's Need to Know column, which you can have waiting in your inbox each morning if you sign up for it here.
-- Why two Wall Street titans just turned bullish on U.S. stocks
-- Why 'Rule of 10' stocks like Nvidia and Meta are now poised for a comeback, according to Goldman Sachs
-- An earnings boom is around the corner, and it could blindside stock-market bears
A stock's forward price/earnings ratio is its price divided by the consensus 12-month earnings-per-share estimate among analysts working for brokerage and research firms. These estimates are weighted by companies' market capitalization for the S&P 500 SPX and the index's 11 sectors.
The S&P 500's forward P/E ratio has declined to 19.4 from 22.5 at the end of 2025, according to LSEG. But the index has increased 0.6% this year through Monday, excluding dividends. This means the decline in the forward P/E has been driven by increases in rolling 12-month EPS estimates.
Here is a roundup of the 11 sectors of the S&P 500, sorted by their current forward P/E valuations relative to their Dec. 31 valuations, with the full index at the bottom of the list:
Sector or index Current forward P/E to that at Dec. 31 Forward P/E 5-year avg. forward P/E 10-year avg. forward P/E 2026 price change
Information technology 75% 20.0 25.6 22.6 -1.4%
Consumer discretionary 84% 25.1 26.3 24.6 -3.8%
Financial services 85% 14.1 14.5 13.8 -5.7%
Communication services 88% 19.6 18.5 17.2 0.5%
Healthcare 92% 17.0 17.2 16.4 -4.4%
Materials 97% 18.7 17.8 17.7 14.7%
Industrials 99% 24.0 20.7 19.3 11.4%
Real estate 99% 34.9 38.9 40.4 7.4%
Utilities 104% 18.6 18.1 18.0 8.7%
Consumer staples 104% 21.8 20.6 20.0 6.5%
Energy 121% 18.9 12.7 22.2 27.5%
S&P 500 86% 19.4 20.0 19.0 0.6%
Source: LSEG
Forward P/E ratios have declined for all but three of the sectors this year. The information technology sector is trading at only 75% of its Dec. 31 forward P/E valuation, even though the sector has declined by only 1.4% this year. The IT sector's forward P/E is also well below its five-year and 10-year average forward P/E valuations.
While the IT sector as a whole has held up this year, there are plenty of stocks within it that have fallen hard. For example, Oracle's (ORCL) P/E has declined to 19.6 from 25.2 at the end of 2025. Its share price is down 20% this year, while its rolling 12-month consensus EPS estimate has increased 3%.
On the other hand, Nvidia's (NVDA) P/E forward P/E has declined to 20.8 from 24.5, while its share price has risen 1.5% and its rolling 12-month consensus EPS estimate has increased by 19.5%.
Looking further ahead - screening the IT sector
With the IT sector's valuation falling so much this year, you might be interested in a broad play, such as the State Street Technology Select Sector SPDR ETF XLK, which tracks the S&P 500's IT sector by holding all 73 of its stocks.
Keep in mind that even a broad investment in the full S&P 500 is tech-heavy. The portfolio of the SPDR S&P 500 ETF Trust SPY, which tracks the S&P 500 by holding all of its stocks weighted by market capitalization, has a 19% concentration to three tech-sector companies: Nvidia, Apple (AAPL) and Microsoft (MSFT).
To screen individual stocks within the S&P 500 IT sector, we will look at projected compound revenue growth rates (CAGR) from 2026 through 2028. Consensus sales estimates are available through 2028 for 69 companies in the sector. These are mean estimates among analysts polled by LSEG, adjusted by the data provided to match calendar years for companies, such as Nvidia, whose fiscal reporting periods don't match the calendar.
We are also comparing the companies' forward P/E ratios to those as of Dec. 31 and showing year-to-date changes in the P and the E.
Among the 69 companies, these 20 have the highest projected sales CAGR from calendar 2026 through calendar 2028:
Company Two-year est. sales CAGR through 2028 Forward P/E Forward P/E as of Dec. 31 2026 price change Increase in rolling 12-month EPS estimate 5-year avg. forward P/E Palantir Technologies 42.4% 87.1 173.1 -25.5% 48.0% 97.3 Oracle 42.1% 19.6 25.2 -20.2% 2.7% 19.7 Broadcom 35.5% 25.7 31.9 9.7% 36.0% 22.9 Advanced Micro Devices 34.8% 29.5 33.1 15.3% 29.2% 32.5 AppLovin 27.0% 23.6 45.5 -38.0% 19.5% 50.5 Nvidia 25.4% 20.8 24.5 1.5% 19.5% 37.2 Arista Networks 22.1% 39.7 38.6 16.0% 12.8% 33.5 CrowdStrike Holdings 21.7% 77.4 99.1 -14.2% 9.8% 204.8 Seagate Technology Holdings 20.5% 26.5 20.5 86.4% 44.0% 38.9 Western Digital 20.5% 26.1 19.6 103.3% 52.3% 17.1 Datadog 19.4% 46.4 56.9 -19.1% -0.7% 195.0 ServiceNow 18.6% 19.8 37.1 -41.9% 8.9% 57.6 Teradyne 18.2% 53.3 36.7 91.2% 31.8% 32.5 Ciena 17.6% 66.6 41.7 105.2% 28.4% 29.7 Monolithic Power Systems 16.7% 59.2 43.8 51.4% 12.0% 48.0 Microsoft 16.6% 20.6 27.4 -20.5% 6.1% 30.6 Microchip Technology 15.8% 26.7 28.8 15.4% 24.6% 24.3 Palo Alto Networks 14.3% 41.7 45.3 -11.8% -4.4% 57.3 Lam Research 14.2% 38.3 32.1 56.2% 30.8% 25.8 Fair Isaac 13.1% 20.3 38.9 -40.8% 13.4% 41.2
(MORE TO FOLLOW) Dow Jones Newswires
April 14, 2026 09:55 ET (13:55 GMT)
MW These 20 stocks in the now-cheap tech sector -2-
Source: LSEG
In comparison, the IT sector's revenue is expected to increase at a weighted CAGR of 17.7%, while the projected revenue CAGR for the full S&P 500 from 2026 through 2028 is projected to be 7.7%.
Click on the tickers for more about each company.
Read: Tomi Kilgore's guide to the information available on the MarketWatch quote page
The top six companies on the list all have lower forward P/E ratios than they did at the end of 2025, but seven companies on the list have bucked the trend with forward P/E rising this year, in part because of shortages in computer chips as the data center build-out continues to support the development of generative-AI technology.
Five of the companies have had their forward P/E decline as their share prices have risen: Broadcom $(AVGO)$, Advanced Micro Devices $(AMD)$, Nvidia, Arista Networks (ANET) and Microchip Technology (MCHP).
Don't miss: Goldman Sachs has the top rank among the S&P 500 by this remarkable statistic
-Philip van Doorn
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April 14, 2026 09:55 ET (13:55 GMT)
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