Tech Stock Valuation

dominated over the Nasdaq 100, they also overshadowed other major stock

market indices such as the S&P 500 and the DJIA.

As shown in Table 1.2, with a peak average market capitalization of $38.7

billion, the Nasdaq 100 could only be described as the home of large-cap stocks.

Led by Intel ($502.7 billion), Cisco ($482 billion), and Microsoft ($367.4), the

Nasdaq 100 included many of the largest market capitalization companies in the

world. Nasdaq 100 behemoths Intel, Cisco, Microsoft, and Oracle ($256 billion)

were then among the 10 largest S&P 500 stocks. Intel and Microsoft were among

the three largest DJIA stocks. It is one thing to accord a P/E ratio ...